Landmark lead paint abatement case decided in California

In a landmark lead paint liability case, the Superior Court of California has held three of five paint companies liable for public nuisance. The court ordered them to clean up lead paint in California residences painted before 1978, at a total cost of $1.15 billion. The use of lead in interior residential paint was permitted until after 1978, i.e. the manufacture and sale of lead paint was legal when these homes were painted. See People v. Atlantic Richfield Company, et al. Superior Court of California, County of Santa Clara, Case No. 1-00-CV-788657. The court concluded that lead paint in older homes is a public nuisance today, because it still poses a serious health risk to thousands of children in tens of thousands of homes. Three of the paint companies did much more than merely manufacture a legal, if risky, product, back in the 1960s and 1970s. They actively promoted the use of lead paint for interior use, knowing it was hazardous to children. As one of the paint company’s internal publications stated over 100 years ago, in 1900, “It is also familiarly known that white lead is a deadly cumulative poison, while zinc white is innocuous. It is true, therefore, that any paint is poisonous in proportion to the percentage of lead contained in it.” This is the distinguishing, “far more egregious” factor that justifies retrospective cleanup liability, unlike a conventional product liability /negligence case. Could such a decision happen here? It would be much harder, but it is possible, especially now that the California plaintiffs have dug out all the evidence… Here is the text of the decision:

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 The People seek an order to abate the alleged public nuisance created by lead paint 2 manufactured or sold by five Defendants in ten jurisdictions in California. Filed thirteen years 3 ago, the matter came on for a bench trial on July 15-18, 22-25, 29-30, August 1, August 5-8, 4 August 12-15, August 19-22, 2013 in Department 1 (Complex Civil Litigation), the Honorable 5 James P. Kleinberg presiding.1 The appearances of counsel for each trial day are as noted in 6 the record. Pursuant to the Court’s Order of August 16, 2013 each party simultaneously 7 submitted its detailed version of a proposed statement of decision (“PSOD”) for the Court to 8 consider in rendering this opinion. And, on September 23, 2013 the greater part of the day was 9 devoted to closing arguments. Following argument the matter was submitted for decision. On 10 November 4, 2013 the Court issued an Order directing the parties to address issues pertaining 11 to the proposed plan of abatement with which the parties complied; the case then stood 12 resubmitted for decision as of November 26, 2013. 13 On December 16, 2013 the Court issued its Proposed Statement of Decision. On 14 December 31, 2013, consistent with the Rules of Court, all parties submitted objections to the 15 Court’s proposed decision, which have been reviewed and considered.2 To the extent the Court 16 has not revised its decision as stated herein, all objections by the parties are OVERRULED. 17 The Court, having read and considered the oral and written evidence, having observed 18 the witnesses testifying in court, and having considered testimony introduced through 19 depositions, having considered the supporting and opposing memoranda of all parties, having 20 heard and considered the arguments of counsel, and good cause appearing therefore, makes the 21 following findings and conclusions: 22

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Plaintiff is the People of the State of California (People), acting by and through the 2 County Counsels of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano, and 3 Ventura Counties and the City Attorneys of Oakland, San Diego, and San Francisco. The 4 People, for purposes of this action, are residents of the counties of Santa Clara, Alameda, Los 5 Angeles, Monterey, San Mateo, Solano, and Ventura Counties and the cities of Oakland, San 6 Diego, and San Francisco (collectively and referred to herein as “Jurisdictions”). Cross- 7 Defendant Counties of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano, and 8 Ventura are charter or general law counties organized and existing under the Constitution and 9 laws of the State of California. Cross-Defendant City and County of San Francisco is a charter 10 city and county organized and existing under the Constitution and laws of the State of 11 California. Cross-Defendant Cities of San Diego and Oakland are charter cities organized and 12 existing under the Constitution and laws of the State of California. In this decision the Plaintiff 13 14 is referred to as the People, the public entities, and the Jurisdictions. 15 Throughout this litigation, the public entities have been represented both by their 16 respective government counsel and by private counsel.3 17

B. Defendants

18 Defendants and Cross-Complainant Sherwin-Williams Company were among the 19 largest manufacturers and sellers of lead pigment and paint containing lead pigment in the 20 United States in the 20th century. (Fed. Trade Com. v. Nat. Lead Co. (1957) 352 U.S. 419, 21 22 23 24 25

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 424; P517 at 1-3, 9.)4 The predominant use of white lead pigment was for paint applications. 2 (Tr. 543:21-26.)5 3 Defendant Atlantic Richfield Company (“ARCO”) is a Delaware corporation with its 4 principal place of business in Illinois. Defendant ConAgra Grocery Products (“ConAgra”) is a 5 Delaware corporation with its principal place of business in Nevada. Defendant E.I. Du Pont de 6 Nemours and Company (“DuPont”) is a Delaware corporation with its principal place of 7 business in Delaware. Defendant NL Industries (“NL”), formerly known as the National Lead 8 Company, is a New Jersey corporation with its principal place of business in Texas. Defendant 9 Sherwin-Williams Company (“SW”) is an Ohio corporation with its principal place of business 10 in Ohio. SW is also a cross-complainant, seeking declaratory relief. 11 As described more fully below, the corporate histories of ARCO and ConAgra are of 12 some moment in this litigation. 13

14 C. ARCO, ConAgra, and successor liability

15 Both ARCO and ConAgra make the threshold argument that since they were the result 16 of prior mergers and acquisitions, and the alleged bad acts occurred years before the present 17 iteration of these companies, they cannot be liable for any wrongs of their predecessors. 18 The People sue ARCO as alleged successor to The Anaconda Company and certain of 19 its former subsidiaries. (¶ 9.) The evidence shows promotion by two of the subsidiaries: 20 Anaconda Lead Products Company (“ALPC”), and International Smelting & Refining 21 22 Company (“IS&R”). ALPC operated a lead pigment manufacturing plant in East Chicago, 23 Indiana from 1920 until 1936, when ALPC was dissolved. (Ex. 291_004.) IS&R was the sole 24 shareholder of ALPC at the time of its dissolution. ALPC’s assets and properties were 25 4 Defendant E.I. Du Pont de Nemours and Company was not a party to the FTC proceeding. 26 5 As used in this decision, “Tr.” refers to the trial transcript by page and line, “Dkt.” Refers to the Court’s 27 Complex Civil case-specific website, “P” refers to Plaintiffs’ trial exhibits; Defendants’ trial exhibits are similarly noted. “¶” refers to paragraphs in the operative complaint. The Court permitted the parties to introduce testimony 28 by way of depositions subject to objections which the Court ruled upon. The net testimony was admitted along with attendant exhibits. People v. Atlantic Richfield Company, et al. 3 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 distributed to IS&R upon ALPC’s dissolution. IS&R became the owner of the East Chicago 2 plant at that time, and operated the plant from 1936 until 1946, when it sold the plant to an 3 unrelated entity and exited the lead pigment business. (Exs. 285, 291_004.) 4 When ALPC, and later IS&R, operated the East Chicago plant, the plant produced dry 5 white lead carbonate pigment for sale under the “Anaconda” brand name to manufacturers of 6 paint and to manufacturers of non-paint products such as ceramics. (Ex. 285.) Beginning in 7 1931, the plant also produced white lead-in-oil, which also was sold under the “Anaconda” 8 brand name. (Id.) Plaintiffs’ evidence of promotions published by any alleged ARCO 9 predecessor before 1936 consists of promotions published by ALPC. 10 ARCO maintains it has not succeeded to the liability, if any, that ALPC would have for 11 those promotions if it still existed. ARCO contends the shareholders of a dissolved corporation 12 do not succeed to its liabilities as a result of the dissolution. Thus, ARCO argues, IS&R did 13 14 not succeed to the liabilities, if any, of ALPC. Although IS&R later merged with the 15 Anaconda Company, which in turn merged with ARCO, it is submitted those mergers do not 16 provide any basis for holding ARCO to be the successor to the liabilities of ALPC. 17 As for ConAgra, in 1962 W.P. Fuller & Co. merged with Hunt Foods and Industries 18 (“Hunt”) (Ex. 1 to People’s Request for Judicial Notice (“PRJNMA”)); in 1968 Hunt, Canada 19 Dry and McCall consolidated to form Norton-Simon (Ex. 2 to PRJNMA); in 1993 Norton- 20 Simon merged with Beatrice U.S. Food Corp. to form the Beatrice Company (Ex. 3 to 21 PRJNMA); and later in 1993 Beatrice Company merged into Hunt-Wesson, Inc. (Ex. 4 to 22 PRJNMA); in 1999 Hunt-Wesson, Inc. changed its name to ConAgra Grocery Products 23 Company (Ex. 5 to PRJNMA). 24 ConAgra introduced evidence that in 1964, before Hunt merged with Canada Dry and 25 McCall to form Norton-Simon, Hunt transferred all assets and liabilities relating to the paint 26 business of W.P. Fuller & Co. to a separate and distinct subsidiary named W.P. Fuller Paint 27 Co. (Ex. 1447.001-009.) W.P. Fuller Paint Co. remained in business for several years after its 28 creation. (Id. at 11-23.) In 1967 W.P. Fuller Paint Co. sold the assets and liabilities of the People v. Atlantic Richfield Company, et al. 4 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 paint business to Fuller-O’Brien Corporation (“O’Brien”). Unlike Hunt, O’Brien was a paint 2 company and remained in the paint business years after its acquisition of W.P. Fuller Paint 3 Co.’s assets and liabilities. (Ex. 12 to Anderson Depo at pages 227, 592.) W.P. Fuller Paint 4 Co. changed its name to WPF, Inc. and dissolved in 1968. (Ex. 1447.011-023.) ConAgra 5 maintains that because any paint liabilities of Fuller were never passed to Norton-Simon, the 6 chain of potential successor liability was broken. And, ConAgra argues, because this is an 7 equitable action, the facts and law must be evaluated through the lens of equity and the 8 question is whether imposition of liability would not only be legally appropriate, but would be 9 fair and just under the circumstances.6 10 The People have addressed these arguments as follows: 11 “If one corporation has merged into another, the surviving corporation is subject to all 12 liabilities of the merged or now-defunct corporation.” (Cal. Prac. Guide Pers. Inj. Ch. 2(II)-F, § 13 14 2:1681, citing Corp. Code, § 1107.) “Generally, the purchaser of a corporation’s business or 15 assets does not become liable for the transferor’s obligations simply by reason of the purchase. 16 But the rule is otherwise if the purchaser assumes the corporation’s liabilities as part of the 17 purchase price.” (Cal. Prac. Guide Pers. Inj. Ch. 2(II)-F, § 2:1682, citations omitted.) Absent a 18 true merger or express assumption following an asset sale, successor liability may be imposed 19 in the event of a de facto merger, whereby a corporate acquisition in the form of an asset 20 purchase achieves the same results as a merger. (Marks v. Minnesota Mining & Mfg. Co. 21 (1986) 187 Cal.App.3d 1429, 1435.) Successor liability may also be imposed pursuant to the 22 mere continuation doctrine, where the purchaser acquires the seller’s assets for inadequate 23 consideration or one or more persons were officers, directors or stockholders of both 24 corporations. (Ray v. Alad (1977) 19 Cal.3d 22, 29.) “Notwithstanding the absence of a true 25 merger, a ‘de facto’ merger or an express assumption, an assumption of liability may be 26 implied in law where it is both ‘fair’ to do so and necessary to prevent injustice.” (Cal. Prac. 27 28 6 ConAgra is occasionally referred to in this decision as Fuller for historical context. People v. Atlantic Richfield Company, et al. 5 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

D. Decision on successor liability of ARCO and ConAgra

3 4 The Court finds ARCO succeeded to the liabilities of Anaconda and IS&R pursuant to 5 corporate mergers and/or express assumption of liabilities and that IS&R’s liabilities included 6 that of its agent, ASC. IS&R’s liabilities included those of ALPC and ASC, which IS&R 7 succeeded to under the de facto merger and/or mere continuation doctrines. And. by 8 succeeding to the liabilities of ALPC, IS&R also succeeded to the liabilities of ALPC’s agent, 9 ASC, pursuant to agency principles. All of these entities are referred to jointly herein as 10 “ARCO.” Similarly, the Court finds ConAgra succeeded to Fuller’s liabilities as a result of a 11 series of corporate mergers and/or the express assumption of liabilities. (¶¶ 8-12.) 12

The Court finds it is fair and appropriate in this case to so hold and necessary to

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prevent an injustice. Therefore, ARCO and ConAgra do not avoid liability on this

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ground.

15 16

II. PRE-TRIAL PROCEDURAL HISTORY AND RELEVANT AUTHORITIES

17 The public entities’ claims against defendants originally included causes of action for 18 fraud, strict liability, negligence, unfair business practices, and public nuisance. County of 19 Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 300 (hereinafter cited as 20 “Appeals Decision”) The Superior Court (Judge Jack Komar) granted defendants’ motion for 21 summary judgment on all causes of action. The Court of Appeal reversed the Superior Court’s 22 judgment of dismissal and ordered the lower court to reinstate the public-nuisance, negligence, 23 strict liability, and fraud causes of action. (Id. at p. 333.) 24 25 26 7 In response ARCO and ConAgra argue Rayoffers limited guidance because Ray was a products liability case, not an equitable action relating to an alleged public nuisance. In products liability cases, successor liability is imposed 27 for several policy reasons such as the ability of successor entities to spread the risk of liability among current purchasers of the product line and the fact that the goodwill of the predecessor is typically enjoyed by the 28 successor. Id. at 25. The Court holds the latter policy reason to be persuasive. People v. Atlantic Richfield Company, et al. 6 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Thereafter, the public entities filed a fourth amended complaint (“FAC”) that alleged a 2 single cause of action for public nuisance, and sought only abatement; that is the claim at issue 3 in this decision. 4 The relevant statutory law provides: 5 “Anything which is injurious to health … or is indecent or offensive to the senses, or an 6 obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life 7 or property … is a nuisance.” Civ. Code, § 3479 “A public nuisance is one which affects at the same time an entire community or 8 neighborhood, or any considerable number of persons, although the extent of the annoyance or 9 damage inflicted upon individuals may be unequal.” Civ. Code, § 3480 10 Abatement, pursuant to Civ. Code, § 3491 is the result sought in this case. 11 A civil action may be brought in the name of the people of the State of California to 12 abate a public nuisance. Code Civ. Proc., § 731; Gov. Code, § 26528 13 “[P]ublic nuisances are offenses against, or interferences with, the exercise of rights 14 common to the public.” (People ex rel. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1103) “Of 15 course, not every interference with collective social interests constitutes a public nuisance. To 16 qualify, and thus be enjoinable [or abatable], the interference must be both substantial and 17 unreasonable.” Acuna at 1105. It is substantial if it causes significant harm and unreasonable if 18 its social utility is outweighed by the gravity of the harm inflicted. Id. 19 When hearing this case on pleading issues the Appeals Decision held Santa Clara, San 20 Francisco, and Oakland brought a civil action in the name of the People seeking to abate a 21 public nuisance. The public entities alleged that lead causes grave harm, is injurious to health, 22 and interferes with the comfortable enjoyment of life and property. The Court of Appeal found 23 the complaint was adequate to allege the existence of a public nuisance for which these 24 entities, acting as the People, could seek abatement. Subsequently, the Supreme Court declined 25 to review the Appeals Decision.8 Thus, the following language of the Appeals Decision is 26 controlling: 27 28 8 Rehearing denied by County of Santa Clara v. Atlantic Richfield Company, 2006 Cal.App. LEXIS 438 (Cal.App. 6th Dist., Mar. 24, 2006) Time for Granting or Denying Review Extended County of Santa Clara v. AtlanticPeople v. Atlantic Richfield Company, et al. 7 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Here, the representative cause of action is a public nuisance action brought on behalf of the People seeking abatement. Santa Clara, SF, and Oakland are not seeking damages for 2 injury to their property or the cost of remediating their property. Liability is not based merely 3 on production of a product or failure to warn. Instead, liability is premised on defendants’ promotionoflead paint for interior use with knowledge of the hazard that such use would 4 create. This conduct is distinct from and far more egregious than simply producing a defective product or failing to warn of a defective product; indeed, it is quite similar to instructing the 5 purchaser to use the product in a hazardous manner, which Modesto [City of Modesto 6 Redevelopment Agency v. Superior Court (2004) 119 Cal.App.4th 28] found could create nuisance liability. (emphasis in original) Id. at 309 7 8 *** 9 Because this type of nuisance action does not seek damages but rather abatement, a plaintiff may obtain relief before the hazard causes any physical injury or physical damage to 10 property. A public nuisance cause of action is not premised on a defect in a product or a failure to warn but on affirmative conduct that assisted in the creation of a hazardous condition. Here, 11 the alleged basis for defendants’ liability for the public nuisance created by lead paint is their affirmative promotion of lead paint for interior use, not their mere manufacture and distribution 12 of lead paint or their failure to warn of its hazards. Id. at 309-310 13

***

14 [L]iability for nuisance does not hinge on whether the defendant owns, possesses or controls 15 the property, nor on whether he is in a position to abate the nuisance; the critical question is 16 whether the defendant created or assisted in the creation of the nuisance. (emphasis supplied) Id. at 306, quoting Modesto at 38 17

The People sought to prove that defendants assisted in the creation of this nuisance by

18 concealing the dangers of lead, mounting a campaign against its regulation, and promoting lead 19 paint for interior use. The People further claimed defendants did so despite their knowledge for 20 nearly a century that such a use of lead paint was hazardous. Had defendants not done so, it is 21 asserted, lead paint would not have been incorporated into the interiors of such a large number 22 of structures and would not have created the public health hazard that the People contend now 23 exists. 24 As noted by the Court of Appeal: 25 A public nuisance cause of action is not premised on a defect in a product or a failure to warn but on affirmative conduct that assisted in the creation of a hazardous condition. Here, the 26 alleged basis for defendants’ liability for the public nuisance created by lead paint is their 27 28 RichfieldCompany, 2006 Cal. LEXIS 7476 (Cal., May 22, 2006) Review denied by County of Santa Clara v. Atlantic Richfield Company, 2006 Cal. LEXIS 7622 (Cal., June 21, 2006) People v. Atlantic Richfield Company, et al. 8 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 affirmative promotion9 of lead paint for interior use, not their mere manufacture and distribution of lead paint or their failure to warn of its hazards. Appeals Decision at 309-310 2 3 While this Court may take judicial notice of decisions from other jurisdictions that 4 pertain to lead paint litigation (e.g., Rhode Island, Wisconsin), those cases are not controlling 5 and are of marginal value because of the varied legal standards involved. 6

III. TRIAL

7 Trial to the Court of the sole remaining cause of action – public nuisance – began on 8 July 15, 2013 after years of intense discovery and motion practice.10 Over the course of 23 trial 9 days the parties introduced over 450 exhibits into evidence. At the close of live testimony, the 10 parties – as permitted by the Court — submitted 25 depositions with attendant exhibits, portions 11 of which were admitted into evidence after the Court ruled on objections. During the trial the 12 Court ruled on over 30 written evidentiary objections and motions.11 13 14 15 9 The Court adopts the standard definition of “promotion”: “the act of furthering the growth or development of something; especially: the furtherance of the acceptance and sale of merchandise through advertising, publicity, or 16 discounting” Merriam-Webster Dictionary, 2013 17 10 Retired United States District Judge Eugene M. Lynch served as appointed discovery referee and held over 60 hearings and conferences. SW objects the Court did not allow sufficient time for discovery; that objection is 18 OVERRULED. 19 11 The Court initially allocated 30 hours to each side (Plaintiff on the one hand, Defendants the other) for the presentation of live testimony (opening statements, motions, closing arguments, and procedural sessions were not 20 included). On its own motion the Court expanded the time to 40 hours per side after reviewing the parties’ more thoughtful witness time estimates. Defendants objected to this allocation and asserted that the imposition of time 21 limits for testimony violated due process. The Court disagrees. Both California and federal courts have regularly upheld time limitations on testimony. (Hernandez v. Kieferle (2011) 200 Cal.App.4th 419, 438; see also General 22 SignalCorp.v. MCI Telecommunications Corp. (9th Cir. 1995) 66 F.3d 1500, 1508, citing Monotype Corp. v. Intl. Typeface Corp. (9th Cir.1994) 43 F.3d 443, 451 [finding the court’s time limit reasonable, even though it 23 provided significantly less time than the parties estimated would be required]. Imposing time limits is well within this Court’s discretion (see, e.g., K.C. Multimedia, Inc. v. Bank of Am. Tech. and Operations, Inc. (2009) 171 24 Cal.App.4th 939, 951), and permitted by §352 of the Evidence Code. Each Defendant had time to present its case and, in addition, the Court provided Defendants with extra time after they had exceeded their allotment. (Tr. 25 3146:20-3147:2; 3239:24-3240:2.) Defendants were able to conduct examinations of their own expert witnesses as well as lengthy cross examinations of the People’s witnesses (often in excess of the direct examination times), to 26 present additional testimony through depositions, and to enter hundreds of documents into evidence. Each Defendant had ample opportunity to present the evidence in support of its case through able counsel who brought 27 extensive experience in “lead paint” litigation to this case. Finally, after reviewing Defendants’ offers of proof regarding testimony that might have been presented with additional time [Dkt. Nos. 3459, 3460, 3461, 3462, 28 3463, 3464, 3465, 3466, 3467, 3468 & 3473], it is noteworthy and convincing that the Defendants did not claim surprise as to any of the People’s testimony at trial. The Court does not find that Defendants’ proffered testimony would have changed its findings or conclusions. None of the parties sought appellate relief as to these limits. People v. Atlantic Richfield Company, et al. 9 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 The trial concerned the following issues:

2 ? Is white lead carbonate and the paint in which it is a key ingredient harmful, 3 particularly to children? 4 ? If so, what harms does it cause? 5 ? Is there a present danger that needs to be addressed by the Court? 6 ? Did the Defendants promote and sell this product in the Jurisdictions? 7 ? If so, during what period and to what extent? 8 ? Did the defendants sell the product with actual or constructive knowledge (if 9 constructive knowledge was deemed sufficient) that it was harmful? 10 ? To what extent are higher blood lead levels due to non-paint sources, such as deposits 11 from gasoline? Or candies? Or water? And does the existence of these other sources 12 supplant any liability of these defendants? 13 ? Does intact lead paint pose a hazard? And if so, to what extent? 14 ? Does the undisputed reduction in tested blood lead levels over time mean the issues in 15 this case are resolved? 16 ? To what extent do existing programs at all government levels deal with the problem? 17 ? Is the issue with local governments a lack of resources, or a lack of will by those 18 entities? 19 ? Is the proposed abatement solution unrealistic as to cost, time, or manageability? 20 ? Is the proposed abatement solution itself unlikely to be successful in the long run? 21 ? Do other defenses, such as those raising constitutional issues, preclude liability? 22

IV. THRESHOLD FINDINGS

23 24 Two threshold issues are disposed of as follows: 25 First, the question of “pigment” versus “paint.” SW in particular strenuously argued 26 that lead pigment must be differentiated from lead paint. It is undisputed that certain companies 27 made pigment and sold it as a component for paint. Therefore, and in contrast, the argument is 28 People v. Atlantic Richfield Company, et al. 10 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 since paint was produced by many companies, it is wrong to hold these five defendants liable 2 for paint manufactured and installed by others. The Court adopts a different position: that lead 3 pigment is, by itself, not applied to walls and woodwork but is the dangerous component of 4 paint. The Appeals Decision speaks of “lead paint” and, as it must, the Court is bound by that 5 definition of the product at issue. 6

Second, the Court has considered the issue of exterior versus interior paint. Again,

7 the Appeals Decision provides direction: “Here, the alleged basis for defendants’ liability for 8 the public nuisance created by lead paint is their affirmative promotion of lead paint for 9 interior use, not their mere manufacture and distribution of lead paint or their failure to warn 10 of its hazards.” (emphasis supplied) Id. at 310 Of equal significance, and beyond the cited 11 language, the Court is convinced the People have not sustained their burden of proof regarding 12 exterior paint and the element of causation. This is so because there are multiple causes of lead 13 found on the outside of houses, including the residue from leaded gasoline and that tracked 14 from other locations, that make it improper for the court to connect these defendants to outside 15 hazards. 16

Therefore, based on both the language of the Appeals Decision and,

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independently, the lack of persuasive evidence, this decision is based solely on the issue of

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lead paint as produced, promoted, sold, and used for interior use.

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20 V. PLAINTIFF’S LEGAL AND EVIDENTIARY POSITIONS

23 A. Legal standards

24 In a public nuisance case seeking only abatement, “the burden of the People [is] to 25 prove the case only by a preponderance of the evidence.” (People v. Frangadakis (1960) 184 26 27 28 12 In this decision the Court draws heavily upon the detailed PSODs supplied by the parties. People v. Atlantic Richfield Company, et al. 11 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Cal.App.2d 540, 549-50; see also Evid. Code, § 115 [“Except as otherwise provided by law, 2 the burden of proof requires proof by a preponderance of the evidence”].) 3 Among the rights common to the public is the right to public health. This includes the 4 right to be free from the harmful effects of lead in paint. Lead in homes in the Jurisdictions is 5 injurious to health and interferes with the comfortable enjoyment of life and property. (¶¶ 31- 6 36, 82-95, 100-103.), is a nuisance that affects entire communities and a considerable number 7 of persons residing in those Jurisdictions (FAC ¶¶ 37-41, 46-72.), and causes and is likely to 8 cause significant harm to children, families, and the community at large. (FAC ¶¶ 31-72, 82- 9 95, 100-103, 218-221, 228-231.) 10

11 B. Defendants’ Knowledge

12 The Defendants, as delineated and limited further in this Decision, are liable for public 13 nuisance if it promoted “lead paint for . . . use with knowledge of the hazard that such use 14 would create.” Appeals Decision at 317. Each Defendant’s knowledge of that hazard may be 15 actual or constructive. (See Selma Pressure Treating Co. v. Osmose Wood Preserving Co. of 16 America, Inc. (1990) 221 Cal.App.3d 1601, 1620 [holding that defendant may be liable for 17 public nuisance if it “knew or should have known” that its disposal practices might threaten the 18 water supply]; Ileto v. Glock Inc. (9th Cir.) 349 F.3d 1191, 1214-15 [holding, under California 19 nuisance law, that defendants may be liable if they knew or should have known of hazard 20 caused by their promotion, distribution, and sale of firearms].) 21 22 This is consistent with general tort law principles – which require only proof of 23 constructive knowledge – as well as nuisance law. (See John B. v. Superior Court (2006) 38 24 Cal.4th 1177, 1190 [reviewing constructive knowledge requirement within general negligence 25 principles]; Leslie Salt Co. v. San Francisco Bay Conservation & Development Com. (1984) 26 153 Cal.App.3d 605 [discussing property owners’ liability for nuisance where the owners knew 27 or should have known of the condition that constitutes the nuisance].) Each Defendant’s actual 28 or constructive knowledge may be proven by both direct and circumstantial evidence. “Both People v. Atlantic Richfield Company, et al. 12 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 direct and circumstantial evidence are admissible in proof of a disputed fact,” and “[n]either is 2 entitled to any greater weight than the other.” (3 Witkin, Cal. Evid. (4th ed.) § 846.) “A verdict 3 or finding may be founded on circumstantial evidence alone, even on circumstantial evidence 4 that is opposed by direct and positive testimony.” (Id. at § 856.) 5 Courts have held in a variety of tort cases that actual knowledge may be proven by 6 circumstantial evidence. (See, e.g., Axis Surplus Ins. Co. v. Reinoso (2012) 208 Cal.App.4th 7 181, 190, [circumstantial evidence used to prove knowledge of dangerous property conditions]; 8 Santillan v. Roman Catholic Bishop of Fresno (2012) 202 Cal.App.4th 708, 723 9 [circumstantial evidence used to prove knowledge for purposes of notice requirement for 10 sexual abuse case]; Yuzon v. Collins (2004) 116 Cal.App.4th 149, 163-64 [circumstantial 11 evidence used to prove landlord’s knowledge of animal’s dangerous propensities].) 12 As recited in Civil Jury Instruction 202: 13 14 Evidence can come in many forms. It can be testimony about what someone saw or heard or smelled. It can be an exhibit admitted into evidence. It can be someone’s opinion. 15 Direct evidence can prove a fact by itself. For example, if a witness testifies she saw a jet plane 16 flying across the sky, that testimony is direct evidence that a plane flew across the sky. Some evidence proves a fact indirectly. For example, a witness testifies that he saw only the white 17 trail that jet planes often leave. This indirect evidence is sometimes referred to as 18 “circumstantial evidence.” In either instance, the witness’s testimony is evidence that a jet plane flew across the sky. As far as the law is concerned, it makes no difference whether evidence is 19 direct or indirect. You may choose to believe or disbelieve either kind. Whether it is direct or indirect, you should give every piece of evidence whatever weight you think it deserves. 20 21 Even if the People have not proven that each Defendant had actual knowledge of the 22 hazard that was created by the use of lead paint on homes in the Jurisdictions, the People 23 contend they have proven that the Defendants had constructive knowledge of that hazard. 24 (FAC ¶¶73-136.) The Court agrees with the People on this point. 25

The Court finds this constructive knowledge took a variety of forms, including:

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 associated with lead paint, they continued to sell it. (FAC ¶¶ 73-221.) Defendants’ argument 2 that they should not be held liable because they did not understand the full panoply of harms 3 caused by lead poisoning is simply not persuasive and contrary to law. (Crowe v. McBride 4 (1944) 25 Cal.2d 318, 322 [“As said in the Restatement, Torts, section 435: ‘If the actor’s 5 conduct is a substantial factor in bringing about harm to another, the fact that the actor neither 6 foresaw nor should have foreseen the extent of the harm or the manner in which it occurred 7 does not prevent him from being liable.’”], (emphasis added.) 8 And, as the Court of Appeals held: “The fact that the pre-1978 manufacture and 9 distribution of lead paint was ‘in accordance with all existing statutes does not immunize it 10 from subsequent abatement as a public nuisance.’” Appeals Decision at 310. 11

12 C. Harm from Lead is Well-Documented

13 According to the Centers for Disease Control and Prevention (“CDC”), 14 15 Lead is a poison that affects virtually every system in the body. It is particularly harmful to the developing brain and nervous system of fetuses and young 16 children. . . . The risks of lead exposure are not based on theoretical calculations. They are well known from studies of children themselves and are not extrapolated 17 from data on laboratory animals or high-dose occupational exposures. 18 (CDC, Preventing Lead Poisoning in Young Children (1991) Ex. 7. Children are particularly 19 susceptible to lead poisoning because they absorb lead much more readily than adults, and 20 because their brains and nervous systems are still developing. 21 In 1978, the U.S. Consumer Product Safety Commission banned the use of lead-based 22 paint in order to reduce the risk of lead poisoning in children. Eight years later the California 23 Legislature declared childhood lead exposure the most significant childhood environmental 24 health problem in the state, and enacted statutes and regulations aimed at reducing human 25 exposure to lead. (See,e.g., Cal. Health & Saf. Code § 124125.) Despite this federal and 26 statewide effort, California children continue to be harmed by lead-based paint each year, and 27 lead-based paint remains the leading cause of lead poisoning in children who live in older 28 housing. People v. Atlantic Richfield Company, et al. 15 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 On May 16, 2012, the CDC eliminated the blood lead level of concern that had been 2 used to define lead poisoning in recognition of the fact that “no safe blood lead level in 3 children has been identified.” (See CDC Response to Advisory Committee on Childhood Lead 4 Poisoning Prevention Recommendations in “Low Level Lead Exposure Harms Children: A 5 Renewed Call of Primary Prevention,” U.S. CDC (May 16, 2012) (“CDC Response”).)13 6 Since antiquity, it has been well known that lead is highly toxic and causes severe 7 health consequences when ingested. (Tr. 2723:14-2725:1.) Infants and toddlers are most 8 vulnerable to lead poisoning because they absorb far more lead than adults and older children. 9 Because their brains and other organs are still rapidly developing, infants and toddlers also 10 sustain far greater damage when exposed to lead. (Tr. 109:20-110:20; 134:23-136:8.) When 11 ingested in large quantities, lead is fatal. High-level lead exposure can cause seizures and 12 coma, necessitating hospitalization, invasive medical procedures, and administration of drugs 13 14 with significant side effects. It can also cause brain swelling, kidney damage, anemia, 15 disintegration of blood cells, and severe abdominal complaints. Intermediate lead exposure is 16 associated with damage to hemoglobin, calcium and vitamin D metabolism, and nerve 17 conduction. (Tr. 350:11-351:10 [discussing P278_002], 354:10-355:24 [relying on P40], 18 1090:4-18, 1094:1-1095:15.) 19 Even relatively low levels of lead exposure have severe health consequences. Blood 20 lead levels (BLLs) between 5 and 10 ?g/dL are associated with adverse effects on 21 development, delayed puberty, decreased growth and hearing, as well as increased anti-social, 22 delinquent, and criminal behavior. (Tr. 350:11-351:10 [discussing P278_2], 356:3-23 [relying 23 on P35], 361:8-362:23 [discussing P48], 363:19-364:15 [relying on P278 at 6-7], 398:19- 24 401:15 [discussing P18], 954:25-956:3, 2796:225 [discussing P18 at 47]; P18 at 20, 21, 30, 45 25 & 47, P19 at 11 & 25, P20 at 2, P40 at 1, P45 at 18-19 & P48.) 26 27 13 Defendants asserted that Dr. Mary Jean Brown, Chief of the Healthy Homes/Lead Poisoning Prevention Branch of the CDC said on November 14, 2011 that the lead problem had been solved. This is incorrect, as pointed out in Ex. 28 1583.406 where Dr. Brown states “one of the things we’re fighting, one of the myths we’re fighting is that lead has been solved.” People v. Atlantic Richfield Company, et al. 16 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Any level of lead exposure significantly lowers a child’s Intelligence Quotient (IQ). 2 The decline in IQ is steepest at lower BLLs. Thus, even BLLs below 5 ?g/dL are associated 3 with decreased IQ and academic abilities, difficulty with problem solving, memory 4 impairment, attention-related behaviors such as ADHD, and anti-social behavior. (Tr. 350:11- 5 351:10 [discussing P 278 at 2]; 358:13-360:27 [relying on P38]; 388:26-389:14 [discussing 6 P278 at 11], 954:25-955:10, 966:1-8, 2316:18-2317:1; P18 at 20, 21, 30, 45 & 47, P19 at 11 & 7 25, P20_2, P45 at 18-19, P48, P54.) 8 Consequently, the drop in IQ of a lead-poisoned child substantially reduces his or her 9 likelihood of leading a happy, productive life. (Tr. 385:2-389:14; 397:22-398:18 [discussing 10 P54], 420:11-16 [same], 2320:22-2321:18; P54, P278A.) Such a drop in IQ lowers the 11 community’s average IQ, increases the number of people considered mentally retarded, and 12 reduces the number of people considered gifted. Lead exposure has been associated with the 13 14 loss of 23 million IQ points among a cohort of American children. This IQ drop diminishes the 15 productivity and well-being of each affected community and society as a whole. (Tr. 385:2- 16 389:14; 397:22-398:18 [discussing P54], 420:11-16 [same], 2320:22-2321:18; P54, P278A.) 17 From 2007 to 2010, at least 50,000 children under six in the Jurisdictions had BLLs 18 above 4.5 µg/dL. In 2010 alone, more than 10,000 children living in the Jurisdictions had BLLs 19 above 4.5 µg/dL. (P223; P239; D1411.5.) These numbers, drawn from the RASSCLE database, 20 represent the minimum number of children in the Jurisdictions who were lead poisoned. (Tr. 21 3261:18-25.) 22 The Court finds that children with elevated BLLS identified in RASSCLE represent “the 23 tip of the iceberg” and understates the prevalence of childhood lead exposure in the Jurisdictions. 24 This is because RASSCLE does not include children who are at greatest risk for lead exposure, 25 such as children who do not have insurance or regular access to health care. Even so, the number 26 of children with elevated BLLS in the Jurisdictions in 2010 identified by RASSCLE is 27 substantial. That number is far greater than the number of persons who contract whopping cough 28 (pertussis), tuberculosis, hanta virus, and other communicable diseases each year. If the same People v. Atlantic Richfield Company, et al. 17 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 number of children contracted one of those diseases in a year, public health officials would call it 2 an epidemic. (Tr. 1373:5-12, 3247:27-3248:5, 3259:23-3261:17, 3261:26-3262:7.) 3 Moreover, lead paint “disproportionally impacts low income and minority children. (Tr. 4 905:20-906:9, 986:21-987:6, 999:12-1000:23, 1365:19-23, 1370:18-1371:10, 2309:21-2310:8., 5 905:20-906:9, 986:21-987:18, 999:12-1000:23, 1365:19-23, 1370:18-1371:10, 2309:21-2310:8; 6 P45.) African American children and, to a lesser extent, Latino children have much higher 7 average BLLs than white children. (Tr. 986:21-987:18; 2583:5-9, P45.) 8 These consequences are not recent discoveries. Over 100 years ago, in 1900, SW’s 9 internal publication stated, “It is also familiarly known that white lead is a deadly cumulative 10 poison, while zinc white is innocuous. It is true, therefore, that any paint is poisonous in 11 proportion to the percentage of lead contained in it.” Ex. 155 12

13 D. The Inevitable Deterioration of Lead Paint is Not Disputed

14 15 Lead paint inevitably deteriorates, leaving behind lead-contaminated chips, flakes, and 16 dust. Dust from deteriorating lead paint deposits on floors, windowsills, and other interior 17 surfaces. (Tr. 190:28-191:27, 1262:16-28; 3092:21-3093:8, 3130:22-28; 3131:13-3133:4; P10, 18 table 5.7.) Deterioration is dramatically accelerated when lead paint is on high friction 19 surfaces, such as windowsills and doors. (Tr. 175:16-22, 160:13-24, 992:21-993:1, 3129:7-14.) 20 Deterioration of lead paint on the exterior of homes contaminates surrounding soil. Lead 21 contaminated soil is often tracked into homes. (Tr. 176:14-27, 982:23-983:10 [relying on P16, 22 P28_16], 986:5-13, 2053:2-7.) Lead contamination in soil and dust in older homes is almost 23 always due to lead in paint rather than other environmental contaminates. (Tr. 192:23-194:22 24 [relying on P10 at 4-5, Table 6.3, P11 at 1-6], P277_18, 985:4-27 [relying on P16, P280_17], 25 1500:16-24, 1501:6-1502:18; P45_40.) 26

27 E. Young Children are at Greatest Risk

28

1 As part of normal development, young children engage in hand-to-mouth behavior, and 2 often ingest dust, soil, and other particles. Young children also regularly chew on accessible 3 surfaces and objects, including windowsills and other interior woodwork. (Tr.134:23-136:8, 4 161:1-16, 1374:22-28, 1461:3-14, 1462:16-28.) Through these normal developmental 5 behaviors, children in homes containing lead paint ingest that paint in the form of dust, paint 6 chips or flakes. (Tr. 159:10-160:12.) A chip of lead paint that is approximately the size of a 7 period at the end of a sentence is sufficient to cause a BLL of 20 micrograms per deciliter if 8 ingested by a young child. (Tr. 156:6-19.) One gram of lead, the amount of material contained 9 in a standard packet of sugar, if spread over 100 rooms, each measuring 10 feet by 10 feet, 10 would be sufficient to create a lead dust hazard at two times the level recommended by the 11 EPA. (Tr. 2201:21-2203:28.) Lead paint on high friction surfaces presents an immediate 12 hazard, even if it is presently intact, because normal use causes the paint to degrade, exposing 13 14 young children to lead dust. (Tr. 160:13-161:16, 175:1-22, 178:20-25, 2053:2-7.) When intact 15 lead paint is on surfaces such as windowsills and railings that can be mouthed or chewed by a 16 child, the paint is a hazard regardless of whether it is intact. (Tr. 160:13-161:16, 1090:23- 17 1092:21.) Furthermore, lead paint that is currently intact poses a substantial risk of future harm 18 because it will inevitably degrade and be disturbed by normal residential activities, such as 19 renovations. (Tr. 1417:7-27, 3133:9-28.) 20

F. Experts, Federal Agencies, Physician Associations, and the Public Entities

21 Agree That Lead Paint Is the Primary Source of Lead Exposure for Young 22 Children Living In Pre-1978 Housing 23 24 Leading experts in the field of lead poisoning are virtually unanimous in concluding 25 that lead paint is the primary cause of lead poisoning in young children. (Tr. 140:13-141:19, 26 344:17-22, 2120:15-23.) The federal agencies tasked with identifying the causes of lead 27 poisoning agree that lead paint is the primary source of childhood lead exposure. For example, 28 in 2012, the CDC’s Advisory Committee on Childhood Lead Poisoning Prevention reported

1 that “lead-based paint hazards, including deteriorated paint, and lead contaminated dust and 2 soil still remain by far the largest contributors to childhood lead exposure on a population 3 basis. ” (Tr. 110:21-111:4, 130:18-132:18, 137:11-20; P9_14; P11 at 1-6; P45_40.) The 4 American Academy of Pediatrics recognizes that “[t]he source of most lead poisoning in 5 children now is dust and chips from deteriorating lead paint on interior surfaces.” (Tr. 132:6- 6 17; P66_1037.) Lead paint accounts for at least 70 percent of childhood lead poisoning and is 7 the dominant cause of lead poisoning in children living in older homes. (Tr. 983:12-988:17, 8 1502:6-25.) Nationally, children living in pre-1978 homes are 13 times more likely to have an 9 elevated BLL than those living in post-1978 homes. (Tr. 961:6-17.) In California, 80 to 90 10 percent of cases of childhood lead poisoning involve children living in pre-1980 homes. (Tr. 11 1364:18-1365:5.) And, consistent with national and statewide data, lead paint is the primary 12 source of lead poisoning for children in the Jurisdictions. (Tr. 183:7-15, 905:15-906:9, 13 14 1097:19-1098:5, 1404:29-1405:4, 1413:6-28, 2043:10-25, 2057:19-2058:7, 2229:5-10, 2239:7- 15 2240:9, 2288:4-17, 2320:22-2321:18, 3263:9-3264:7.) 16

G. Lead Paint is Prevalent in the Jurisdictions

17 In 1978, the U.S. Consumer Product Safety Commission prohibited the use of lead- 18 based paint in homes. (16 Code Fed. Regs § 1303.4.) The 2010 census data shows that over 4.7 19 million homes in the Jurisdictions were built before the 1978 ban. (P261; see also P283_014.) 20 The chart below depicts the estimated number of pre-1950 and pre-1978 homes in each of the 21

Public Entity

Pre-1950

1950 – 1979

Total Housing Units (2010 Estimate)

Alameda

173,981

255,444

429,425

Los Angeles

912,852

1,737,349

2,650,201

Monterey

18,772

71,014

89,786

San Mateo

56,556

159,769

216,325

Santa Clara

61,411

364,823

426,234

Solano

18,559

60,519

79,078

22 Jurisdictions according to the census: 23 24 25 26 27 28

Ventura

19,854

154,134

173,988

San Diego

62,330

255,456

317,786

San Francisco

226,333

91,472

317,805

Totals

1,550,648

3,149,981

4,700,628

1 2 3 4 5 According to the 2011 U.S. Department of Housing and Urban Development (HUD) 6 Healthy Homes Survey, 52 percent of pre-1978 homes contain lead-based paint hazards. And a 7 8 large percentage of these homes have children under six years of age living there. Because of 9 the prevalence of lead-based paint in California, all homes built before 1978 are presumed to 10 contain lead-based paint. 143:5-15 [referring to P277_10], 982:23-983:10, 7 Cal. Code. Regs. § 11 35043.) The prevalence of lead paint in California homes is not surprising given the large 12 amount of lead pigment used in paint before the 1978 ban. From 1929 to 1974, 77 percent 13 (1,978,547 tons) of white lead sold in the U.S. was used in paint. An NL advertisement in 1924 14 noted that 350,000,000 pounds of white lead were used in paint every year in the United States 15 – “enough paint to cover with one coat about 3,000,000 houses of average size.” (Tr. 149:20- 16 28 [relying on P4_7]; P230.) Inspections confirm that their pre-1978 homes in the Jurisdictions 17 often contain lead paint. (See, e.g., Tr. 183:7-15; 1413:6-28.) 18 Due to limited resources, government programs in the Jurisdictions have not 19 significantly reduced the number of homes containing lead paint. (Tr. 577:24-581:20, 601:10- 20 22, 641:19-25, 644:11-21, 2295:13-27.) 21

22 H. The Continuing Effect of Lead Paint

23 From 2007 to 2010, at least 50,000 children under six in the Jurisdictions had BLLs 24 above 4.5 µg/dL. In 2010 alone, more than 10,000 children living in the Jurisdictions had 25 BLLs above 4.5 µg/dL. (P223; P239; D1411.5.) These numbers, drawn from the Response and 26 27 28

1 Surveillance System for Childhood Lead Exposure (“RASSCLE”) database,14 represent the 2 minimum number of children in the Jurisdictions who were lead poisoned. (Tr. 3261:18-25.) 3 Children with elevated BLLS identified in RASSCLE understates the prevalence of childhood 4 lead exposure in the Jurisdictions. This is so because RASSCLE does not include children who 5 are at greatest risk for lead exposure, such as children who do not have insurance or regular 6 access to health care. The number of children with elevated BLLS in the Jurisdictions in 2010 7 identified by RASSCLE is substantial. That number is far greater than the number of persons 8 who contract pertussis, tuberculosis, hanta virus, and other communicable diseases each year. 9 (Tr. 1373:5-12, 3247:27-3248:5, 3259:23-3261:17, 3261:26-3262:7.) Moreover, lead paint 10 “disproportionally impacts low income and minority kids. And these are kids who can least 11 afford to take the hit.” (Tr. 905:20-906:9, 986:21-987:6, 999:12-1000:23, 1365:19-23, 12 1370:18-1371:10, 2309:21-2310:8.) 13

14 I. Defendants’ Manufacturing of Lead Pigments for Use in House Paints and as

15 Members of Trade Associations 16 Defendants promoted and sold their lead pigments: (1) as dry white lead carbonate; (2) 17 as white lead-in-oil; and (3) in paints containing white lead pigments. As described by Dr. 18 19 David Rosner, lead pigments are “the basic ingredient that goes into paint, whether it is in a 20 box, or whether it is in a can, or whether it is mixed or not mixed, it is the cake mix that makes 21 the cake.” (Tr. 66:5-11; see also Tr. 664:16-666:17; P517.) 22 ARCO manufactured lead pigments for use in house paints from 1920 until 1946. 23 ARCO was a member of the Lead Industries Association (“LIA”) from 1928 until 1971 and a 24 Class B member of the National Paint Varnish and Lacquer Association (“NPVLA”) from 25 26 27 14 RASSCLE is used by the Childhood Lead Poisoning Prevention Branch (“CLPPB”) to collect information on 28 children found to have elevated blood lead levels. RASSCLE was re-engineered as a state-wide, web-based information system known as RASSCLE II. This program only addresses children who have been tested. Tr.980

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 1933 through 1944. (Tr. 1675:9-25.)15 2 ConAgra manufactured lead pigments for use in house paints from 1894 until 1958. 3 ConAgra was a member of the LIA from 1928 through 1958 and a Class A member of the 4 NPVLA from 1933 through 1962. (Tr. 1663:27-1664:19.) 5 DuPont manufactured lead pigments for use in house paints from 1917 through 1924 6 and then continued to manufacture lead pigments through its contract with NL through the 7 1960s. DuPont was a member of the LIA from 1948 through 1958 and a Class A member of 8 the NPVLA from 1933 through 1972. (Tr. 1656:24-1657:7.) 9 NL manufactured lead pigments for use in house paints from 1891 until 1978. NL was 10 a member of the LIA from 1928 until 1978 and a member of the NPVLA from 1933 through 11 1977. (Tr. 1647:4-16.) 12 SW manufactured lead pigments for use in house paints from 1910 to 1947. It 13 14 manufactured paints with lead pigments from 1880 through the 1970s. SW was a member of 15 the LIA from 1928 through May 1947 and was a Class A member of the NPVLA from 1933 16 through 1981. (Tr. 1626:15-23.) 17

J. Role of the Trade Associations

18 It was generally known that childhood lead poisoning disproportionately affected poor 19 and minority children. (Tr. 1727:16-20.) In 1935, the LIA’s Director of Health and Safety 20 wrote a letter describing the problem of childhood lead poisoning as “a major ‘headache,’ this 21 22 being in part due . . . to the fact that the only real remedy lies in educating a relatively 23 ineducable category of parents.” (Tr. 1723:17-1725:24 [relying on P78].) He went on to say 24 that “[i]t is mainly a slum problem with us.”(Id.) In 1956, he reiterated this to the Assistant 25 Secretary of the U.S. Department of the Interior. (Tr. 1725:5-1726:7 [relying on P145_1]; see 26 also 1725:5 – 1726:7 [relying on P145_001 (“The basic solution is to get rid of our slums, but 27 28 15 The role of the NIA and NPVLA is described below.

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 even Uncle Sam can’t seem to swing that one. Next in importance is to educate the parents, but 2 most of the cases are in Negro and Puerto Rican families, and how does one tackle that job?”)]) 3 and reiterated this at a LIA meeting in 1958 (Tr. 1726:10 – 1727:15 [relying on P86_25 (“One 4 can readily understand why, to the operator of a smelter in California or a lead products plant 5 in Texas, the doings of slum children in our eastern cities may seem of little consequence.”)].) 6 Each Defendant, except DuPont, also learned about the harms of lead exposure through 7 association-sponsored conferences. For example, the LIA held a confidential conference of its 8 members in 1937 which included physicians to discuss lead poisoning. Ex. 154 9 Representatives from NL, SW, and ARCO attended. Transcripts of the conference – “an 10 invaluable summary of present day medical knowledge about lead” – were sent to LIA 11 members, including ConAgra. Although the conference focused on industrial lead poisoning, 12 it discussed childhood lead poisoning. Specifically, conference participants discussed a child 13 14 who had died from lead poisoning, childhood lead poisoning cases involving lead paint in 15 homes, and the difficulty of removing lead from a child’s body. (Tr. 1687:1-1689:27, 1690:18- 16 1691:5 [relying on P98 & P154].) 17 Each Defendant learned about childhood lead poisoning through LIA and/or NPVLA 18 communications. For example, the NPVLA’s executive committee—which included NL—sent 19 a confidential memo in 1939 to its Class A members—which included SW, ConAgra and 20 DuPont. That memo explained that the dangers of lead paint to children were not limited to 21 their toys, equipment, and furniture. (Tr. 1691:12-1693:23 [relying on P81].) 22 NL, ARCO, and DuPont learned about childhood lead poisoning through trade 23 association meetings. For example, during a 1930 meeting of the LIA’s Board of Directors, 24 which included NL, the Board discussed negative publicity regarding lead products, including 25 a report that: (1) lead poisoning of children who chewed on toys, cradles, and woodwork 26 painted with lead paint occurred more frequently than formerly thought; (2) small amounts of 27 lead could kill a child; and (3) physicians were not recognizing lead poisoning. (Tr. 1694:15- 28 1695:21 [relying on P75 & P166].) People v. Atlantic Richfield Company, et al. 24 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 The LIA only disseminated the information it gathered about the hazards of lead paint 2 and childhood lead poisoning to its members. It did not disseminate this information to 3 government agencies or the public.In fact, the LIA often marked its documents as confidential 4 to try to ensure that they would not receive this information. (Tr. 1689:8-18, 1690:16-1691:2 5 [relying on P98 & P154].) 6

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 1186:1-1187:6, 1188:17-1189:07, 1192:9-25, 1218:13-1219:1, 1219:27-1220:10, 1245:15- 2 1246:15 [relying on P28, P8, P34]; see also 2848:16-26; P197.) 3 In the 1920s, scientists from the Paint Manufacturers Association reported that lead 4 paint used on the interiors of homes would deteriorate, and that lead dust resulting from this 5 deterioration would poison children and cause serious injury. (See Tr. 1189:8-26.) Medical and 6 scientific literature published before the 1950s often observed that reported cases of lead 7 poisoning represented only a small fraction of the adults and children poisoned by lead paint. 8 (See Tr. 1165:22-1166:5, 1196:20-1197:6, 1208:7-13) It was accepted by the medical and 9 scientific community before the 1950s, as reflected in literature from as early as 1894, that lead 10 paint was a significant cause of childhood lead poisoning. (Tr. 1197:7-18, 1217:24-1218:12, 11 1274:1-23 [relying on P226 [compendium of articles].) Even before the 1950s, the medical and 12 scientific community recognized that children were particularly vulnerable to lead poisoning, 13 14 and that the harmful effects of lead poisoning were permanent. (See Tr. 1167:12-23; 1215:28- 15 1216:26 [relying on P21].) (See Tr. 1167:1-11; 1195:21-1196:15 [relying on P23].) As early as 16 1933, the medical and scientific community called for the elimination of lead paint in areas 17 frequented by children – including their homes. (See Tr. 1167:24-1168:08, 1198:17-13, 18 1200:4-14, 1200:24-1201:28 [relying on P30].) Other countries began banning the use of lead 19 paint, particularly for home use, in the 1920s and 1930s. (Tr. 354:24-355:24 [relying on P40], 20 1702:20-1703:14 [replying on P142 at 9].) 21

L. Knowledge of the Individual Defendants

22

23 1. ARCO

24 ARCO knew of the hazards of lead paint – including childhood lead poisoning – at the 25 time it promoted, manufactured, and sold lead pigments for home use. (Tr. 1709:21-27.) 26 ARCO learned of the hazards of lead paint – including childhood lead poisoning – through 27 physician(s) it employed and information it received from trade associations. (Tr. 1685:15- 28 1686:3, 1687:1-1689:27, 1690:18-1691:5 [relying on P98 & P154], 1710:5-1711:3 [relying on People v. Atlantic Richfield Company, et al. 26 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 P168].) ARCO’s own internal documents establish that ARCO knew about the hazards of lead 2 paint. In a letter dated 1918, ARCO personnel suggested that one way to eliminate the 3 “poisonous effects” of lead for its workers was “[e]limination of the dust,” minimizing the time 4 that workers were exposed to the dust, and transferring workers once they showed symptoms 5 of poisoning. (P168_13.) Personnel were also aware that poisoning was caused by particles 6 both ingested and inhaled. In another letter dated December 16, 1921, plant personnel from 7 ARCO discussed their interest in learning more about the prevention and detection of lead 8 poisoning in the workplace and asked for more medical information on the subject. The letter 9 attached a medical article dated March, 1921 discussing industrial lead poisoning and the role 10 of lead dust. (Tr. 1709:21-27 [relying on P168]). The letter and article further demonstrate that 11 ARCO personnel followed the medical and scientific literature regarding the hazards of lead 12 and had actual knowledge of those harms. (Ibid.) ARCO had actual knowledge of the hazards 13 14 of lead paint – including childhood lead poisoning – for the duration of its manufacturing, 15 promotion, and sale of lead pigments for home use. (Tr. 1624:21-1625:17.) 16

2. ConAgra

17 ConAgra knew of the hazards of lead paint – including childhood lead poisoning – 18 when it promoted, manufactured, and sold lead pigments for home use. (Tr. 1624:21-1625:17.) 19 ConAgra knew about the hazards of lead paint when the California Supreme Court upheld a 20 jury verdict finding that ConAgra knew about the dangers of white lead production for its 21 22 workers. (Pigeon v. W.P. Fuller (1909) 156 Cal. 691, 702 : “There was abundant testimony 23 tending to show that the process of the manufacture of white lead, as conducted by [ConAgra], 24 was dangerous to those assisting in the work; the danger arising from the inhalation of fumes 25 and vapor . . . and of particles of dust coming from the metal after it had been corroded in the 26 process of converting it into white lead”; see also Tr. 1718:10-24.) 27 Neal Barnard, a former ConAgra employee who developed paint formulas for the 28 company from 1948 until 1967, worked with lead pigments during the time that ConAgra People v. Atlantic Richfield Company, et al. 27 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 produced lead paint. During that time, Mr. Barnard knew that white lead pigment was toxic. He 2 also knew that lead paint chalked and that the resulting lead dust could be ingested by touching 3 the paint. (Barnard Depo. 55:25-56:5, 62:11-62:17.) 4 ConAgra learned of the hazards of lead paint – including childhood lead poisoning – 5 through information it received from trade associations. (Tr. 1687:1-1689:27, 1690:18-1691:5 6 [relying on Exs. P81, P154], 1691:12-1692:14, 1692:18-1693:23.) And ConAgra had actual 7 knowledge of the hazards of lead paint – including childhood lead poisoning – for the duration 8 of its production, marketing, and sale of lead pigments and paint for home use. (Tr. 1624:21- 9 1625:17.) 10

11 3. DuPont

12 DuPont acquired Cawley Clark & Company and Harrison Brothers in 1917 as its first 13 foray into the paint business. DuPont acquired Harrison Brothers, in part, to acquire its 14 knowledge about paint and paint pigments, including lead paint and pigment. (Tr. 1711:12- 15 1712:19 [relying on P172_20], 2852:21-2854:9 [relying on P275 at 10].) 16 By 1913, Harrison Brothers was promoting interior residential paints without lead by 17 touting that those paints did not contain “poisonous” white lead pigments and discussed the 18 absence of poisonous pigments making painted rooms safe for occupants. (Tr. 2848:2-26 19 [discussing P197].) Since this was an advertising gambit by a leading paint manufacturer and 20 necessary competitor of the other defendants, this document undermines the “no knowledge” 21 22 argument of the other defendants in this case. 23 The paints that DuPont acquired from Harrison Brothers were described in a brochure 24 that stated that wallpapers containing lead continually resulted in the circulation of dust and 25 were especially unsuitable for children’s bedrooms and nurseries. (Tr. 2855:18-2856:12 26 [discussing P506].) The brochure also stated that Harrison’s paint contained “no lead, arsenic, 27 or poisonous material of any description . . . .” (Tr. 2847:23-2848:26 [discussing P197].) 28 DuPont’s 1918 advertisements for its Sanitary Flat Wall Finish stated that “good taste decrees People v. Atlantic Richfield Company, et al. 28 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 and health demands the elimination of poisonous pigments” – including lead pigments. (Tr. 2 1713:16-1714:3 [discussing P2 at 14], 1715:1-26; [relying on P177].) 3 In 1937, the Baltimore Public Health Department informed DuPont’s Medical Director 4 that nearly two dozen children had died of lead poisoning. The letter explained to DuPont that 5 each of these children died after chewing on a painted surface, and that the Department was 6 recommending use of paint without lead. (Tr. 1716:6-23 [relying on P159].) 7 DuPont learned of the hazards of lead paint – including childhood lead poisoning – 8 through physician(s) it employed and information it received from trade associations. (Tr. 9 1687:1-1689:27, 1690:18-1691:5 [relying on P98 & P154].) 10 DuPont had actual knowledge of the hazards of lead paint – including childhood lead 11 poisoning – for the duration of its production, marketing, and sale of lead pigments and paint 12 for home use. (Tr. 1624:21-1625:17.) 13 14 4. NL 15 NL had actual knowledge of the hazards of lead paint, including childhood lead 16 poisoning. NL obtained this knowledge through its own review of the scientific and medical 17 literature, LIA communications, LIA and NPVLA meetings, and its own experiences. NL 18 employed medical doctors who were well aware of the hazards of lead paint and tracked the 19 medical literature on this subject. [Tr. 1687:1-1690:27, 1690:18-1691:5 [relying on P81, P988 20 and P154].) 21 22 NL was aware of the hazards of lead dust. For example, in 1912, NL acknowledged that 23 “[i]n the manufacture of the various products of Lead, there are two sources of danger to the 24 health of workmen therein employed; viz., the fumes arising from the smelting or melting of 25 metallic lead, and the dust arising in the processes of making white lead and lead oxides.” (P76 26 at 4.) NL’s corporate representative confirmed that, by the mid to late 1920s, NL knew that 27 children who chewed on toys, cribs, and other objects with lead paint could die from lead 28 People v. Atlantic Richfield Company, et al. 29 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 poisoning. That representative acknowledged that NL was probably aware that children could 2 have convulsions after being exposed to lead in paint. (Tr. 1988:1-1994:3.) 3 During a 1930 meeting of the LIA Board of Directors, it was reinforced to NL that 4 childhood lead poisoning caused by chewing on toys, cradles and woodwork (such as 5 windowsills) containing lead paint occurred more frequently than formerly thought. (Tr. 6 1694:23-1696:3 [describing P166]; see also Tr. 1693:24-1694:22 [relying on P75].) 7

8 5. SW

9 SW had actual knowledge of the hazards associated with lead paint by 1900. In 1900, 10 SW, in its internal publication, Chameleon, told its employees that: 11 It is also familiarly known that white lead is a deadly cumulative poison, 12 while zinc white is innocuous. It is true, therefore, that any paint is poisonous in proportion to the percentage of lead contained in it. This noxious quality 13 becomes serious in a paint which disintegrates and is blown about by the wind: but if a paint containing lead (such as the better class of combinations) 14 is not subject to chalking, the danger is minimized. (P155.) 15 When asked whether SW knew, before 1910, that lead paint could cause lead 16 poisoning, SW’s own expert, Dr. Colleen Dunlavy, acknowledged that “[t]he hazards of . . . 17 lead paints were widely understood for a long time” and that the “hazards [of lead paint] to 18 workers, in particular, were well-known and reflected in Sherwin-Williams’ documents.” (Tr. 19 3036:18-19.) 20 This is also clear from articles published by SW’s employees. For example, in June 21 22 1928, the Journal of Chemical Education published an article by a SW employee who noted 23 that “[v]olumes ha[d] been written on this pigment [lead],” as well as “the facts that it is rather 24 poisonous and has been legislated out of use in some countries.” (P142.) 25 In an internal letter in 1969, an SW executive admitted that “[a]s to a solution to the 26 problem, a very simple statement, but very difficult to carry out, would be to remove the source 27 of lead or put it behind barriers so that the children could not get to it.” (Tr. 1473:24-1474:23 28 [relying on P161].) People v. Atlantic Richfield Company, et al. 30 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 SW learned of the hazards of lead paint – including childhood lead poisoning – through 2 physicians it employed and information it received from trade associations. (Tr. 1687:1- 3 1689:27, 1690:18-1691:5 [relying on P98 & P154].) 4 SW had actual knowledge of the hazards of lead paint – including childhood lead 5 poisoning – for the duration of its production, marketing, and sale of lead pigments and lead 6 paint for home use. (Tr. 1705:21-1706:5.) 7 Based on the facts cited above, the Court finds each Defendant was on notice of the 8 harms associated with lead paint no later than the 1920s and 1930s. Thus, each Defendant had 9 – at the very least –constructive knowledge of the hazards created by its promotion of lead 10 pigment for home use. 11

12 M. Causation

13 California has adopted the substantial factor test of the Restatement Second of Torts. 14 (Viner v. Sweet (2003) 30 Cal.4th 1232, 1239.) This test “subsumes the traditional ‘but for’ test 15 of causation.” (Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 969.) Under this test, 16 independent tortfeasors are liable so long as their conduct was a “substantial factor in bringing 17 about the injury.” (Ibid.) A plaintiff need only “exclud[e] the probability that other forces alone 18 produced the injury;” it need not show that a defendant is the sole cause of the injury. (Arreola 19 v. County of Monterey (2002) 99 Cal.App.4th 722, 748-49.) Where a defendant’s conduct plays 20 more than an “‘infinitesimal’ or ‘theoretical’ part in bringing about injury, damage, or loss,” 21 22 that conduct is a substantial factor in causing the injury. (Rutherford, at 969.) 23 Thus, multiple defendants are liable for public nuisance if they “created or assisted in 24 the creation of the nuisance.” (Appeals Decision at 309.) This is true even if the acts of each 25 defendant are independent concurrent causes of the injury. (Ibid.) It is also irrelevant “whether 26 the defendant owns, possesses or controls the property [which is the site of the nuisance].” 27 (Ibid.) 28 People v. Atlantic Richfield Company, et al. 31 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 The People contend that each Defendant promoted lead paint and/or lead pigment in the 2 Jurisdictions. Whether Defendants’ promotions explicitly mentioned lead is irrelevant. The 3 question is whether Defendants promoted house paints containing lead. Ibid. 4

5 N. Defendants Promoted and Sold Lead Pigment and/Or Lead Paint in the Jurisdictions

6 The Defendants manufactured lead pigments for use in paints in the 20th century. And 7 each Defendant, except ARCO, used these pigments in its own paints. (Tr. 509:13-17; 549:25- 8 550:24.) Each Defendant promoted lead pigment and/or lead paint for use on homes within 9 each of the Jurisdictions, despite knowledge of the hazards of lead. 10 11 Defendants’ promotions included, among other things, ads (1) explicitly telling 12 consumers to use lead paint on their homes; (2) telling consumers to use specific paints or lines 13 of paint that contained lead without mentioning that those paints contained lead; (3) directing 14 consumers to stores where brochures featuring lead paint were provided to customers; and (4) 15 promoting “full line” dealers of the Defendant’s paint, including the Defendant’s lead paint. 16 (Tr. 1634:18-1635:15.) 17 These promotions targeted ordinary consumers as well as painters, trades people, and 18 paint manufacturers. (Tr. 1961:16-1963:9.) 19 Drs. David Rosner and Gerald Markowitz, the People’s historical experts, identified 20 newspaper advertisements promoting lead paint manufactured by DuPont, ConAgra (Fuller), 21 NL, and SW that ran in newspapers in each of the Jurisdictions between 1900 and 1972. (See 22 P233_1.) 23 The following chart identifies the number of ads the People’s experts identified (P233):

Entity

DuPont

Fuller

NL

SW

Alameda County

269

233

240

401

Los Angeles County

28

131

81

350

Monterey County

167

328

162

704

Oakland

162

143

168

221

City of San Diego

63

269

98

685

San Francisco

127

272

126

229

San Mateo County

111

183

219

149

Santa Clara County

207

347

444

305

24 25 26 27 28

Solano County

137

152

260

301

Ventura County

14

28

127

229

1 2

3 1. Campaigns

4 In addition to their individual promotion efforts, Defendants also jointly promoted lead 5 paint in the Jurisdictions through campaigns organized by the LIA and/or NPVLA. (Tr. 6 552:19-553:22.) The purpose of these joint campaigns, which are identified in the chart below, 7 was to sustain, increase, and prolong the use of lead paint. (Tr. 559:21-27.)

Trade Association

Campaign Name

Campaign Years

Involved Defendants

LIA

Forest Products – Better Paint

1934-1939

Fuller, NL, and SW

LIA

White Lead Promotion

1939- 1942; resumed for a brief time after World War II in 1950

Fuller and NL

NPVLA

Save the Surface

First half of the 20th century

DuPont, Fuller, NL and SW

NPVLA

Clean Up – Paint Up

First half of the 20th century

DuPont, Fuller, NL and SW

8 9 10 11 12 13 14 15 16 The Forest Products Better Paint Campaign (“FPBP Campaign”) primarily promoted 17 the use of lead pigments on lumber. The Campaign was active in California because lumber 18 19 was a popular building material for California homes. (Tr. 567:6-24; P185.) The LIA targeted 20 lumber associations on the West Coast, including the California Redwood Association in San 21 Francisco, persuading these associations to enclose two million folders containing “painting 22 instructions” with all bundles of siding for homes. The instructions directed consumers to use 23 lead paint on the interior and exterior of their homes. (Tr.571:23-573:2.) LIA documents 24 confirm that the FPBP Campaign was successful and identify tangible benefits it provided to 25 the lead pigment industry. For example, the LIA reported that because of the Campaign, 26 lumber producers were recommending use of lead paint, over 20,000 lumberyards were selling 27 only lead paint, and that lead paint was now carried by several thousand lumberyards that had 28 never carried it before. (Tr. 575: 6-28; 578:8; P91_8 and 9.)

1 The LIA also reported that the FPBP Campaign increased the lead content in some 2 paints, and that one of the largest paint manufacturers in the U.S., the Paraffin Companies in 3 San Francisco, went from producing leadless paint to paint with 60 percent white lead. (Tr. 4 578:23-579:9.) The LIA further reported that 20,000,000 labels were to be affixed to sashes 5 and doors sold in the United States. These labels advertised white lead on the sashes and 6 doors. (Tr.580:10-21.) 7 The White Lead Promotion Campaign (“White Lead Campaign”) was a joint 8 advertising campaign “aimed specifically at white lead promotion in general.” According to 9 Dr. Rosner, the purpose of the campaign was “to promote the sale of high grade paint, which, 10 of course means white lead,” prevent loss of market position, increase sales, refute allegations 11 that lead paint was hazardous, and improve the “reputation” of the product. The overarching 12 goal was to “show [ ] the importance of white lead to industry [and] help offset the constant 13 14 threat of anti-lead legislation and propaganda.” (Tr. 561:25-563:2 [relying on P80].) 15 The Campaign targeted ordinary consumers, convincing them to apply lead paint to 16 their homes, as well as the painters, and the paint industry more generally. (Tr.869:3-8.) The 17 Campaign generated at least hundreds of advertisements in paint trade journals and national 18 consumer magazines between 1939 and 1942. Dr. Rosner testified that between 1939 and 19 1941, approximately 13,881,000 White Lead Campaign ads appeared in national magazines 20 such as the Saturday Evening Post, Colliers, Better Homes & Gardens, and American Home. 21 In 1942, an additional 8,000,000 advertisements were placed in similar national magazines. 22 (Tr. 586:15-19, 866:22-868:10 [discussing P120], Tr. 869:9, 872:12; Dc503; see also P294, 23 P295, P296, P297, P 298.) 24 These national magazines circulated widely in California, including the Jurisdictions. 25 (Tr. 648:7-653:13 [relying on P190].) In 1942, for example, they reached at least 585,792 26 California consumers. (Tr. 648:19-649:21, 650:13-26, 653:5-13, P120, P190.) 27 The LIA touted the White Lead Campaign as so successful that the demand for white 28 lead outstripped supply. In the first eight months of 1941, the total sales of all lead pigments

1 increased 37.6 percent – “a very substantial increase.” (Tr. 599:11-23; 602:4-17; 604:19- 2 605:7.) 3 The Save the Surface Campaign (“Surface Campaign”) conducted by the NPVLA 4 promoted paint sales, including sales of lead paint, by encouraging consumers to use paint to 5 protect household surfaces. The campaign included advertisements by individual companies 6 and collective advertisements with a common logo and slogan. (Tr. 559:2-16.) The Surface 7 Campaign was very active in California and was considered quite successful. For example, 8 DuPont’s magazine stated in 1920 that its paint sales increased as a result of the Campaign. 9 (Tr. 620: 23-16, 621:24-27, 622:4-11; P189 12.) 10 The NPVLA’s Clean Up – Paint Up Campaign (“Paint Up Campaign”) was a joint 11 effort by different companies to promote paint generally, including lead paint, and to promote 12 their own brands of paint when possible. The Paint Up Campaign ran advertisements in each of 13 14 the Jurisdictions. (Tr. 616:20-617:18, 618:27-619:11.) The NPVLA described the Paint Up 15 Campaign as “undoubtedly” one of the most effective promotions of paint ever. (Tr. 623: 23- 16 624:15.) 17

2. ARCO’s role

18 ARCO began producing dry white lead in 1919 and made its first sale in 1920. (P285- 19 002.) ARCO began promoting lead pigment for house paints in the January 1920 edition of the 20 paint trade journal, Drugs, Oils & Paints. That national trade journal was circulated in 21 22 California. (P01; Tr. 647:9-27, 647:28 – 648:6, 653:5-13; P120.) ARCO advertised its dry 23 white lead for use as a house paint pigment in the journal throughout 1920 on a monthly basis. 24 Its advertisements in Drugs, Oils & Paints from October 1920 through January 1921 promoted 25 dry white lead as a pigment for paint as opposed to other industrial uses. (647:9- 648:6, relying 26 on P001.) 27 From February 1921 through November 1921, ARCO’s monthly advertisements for dry 28 white lead in Drugs, Oils & Paints stated that ARCO had warehouses in Los Angeles and San

1 Francisco. These ads ran through at least December 1921. And beginning in January 1922, the 2 ads stated that ARCO maintained “warehouse stocks [of dry white lead] in principal cities.” In 3 1923, ARCO had a listing in the San Francisco City Directory under the category of “paint 4 manufacturers.” (Tr. 1679:14-22, relying on P001; P218.) 5 In 1931, ARCO began to manufacture white lead-in-oil. ARCO continued to advertise 6 its lead products for house paint in national paint trade journals through October 1936. Those 7 advertisements appeared monthly in national paint trade publications like American Painter 8 andDecorator; American Paint Journal; Paint and Varnish Production Manager; National 9 Painters Magazine; Paint, Oil and Chemical Review; and Painter and Decorator. ARCO 10 directed these ads – which circulated in California – to the paint trade. A number of those ads 11 referred, either in words or pictures, to using ARCO white lead to paint houses. (P285_002 – 12 285_003; P01; P120; Tr. 653:5-13.) 13 14 Between 1931 and 1935, paint companies in California purchased white lead from 15 ARCO. DeGregory Paint Stores of Los Angeles, advertised in the Los Angeles Times on 16 September 23, 1934, and January 7, 1940, that it had lead paste for sale. ARCO’s sales records 17 show that DeGregory Paint Stores purchased white lead from ARCO in 1934, and continued to 18 purchase white lead through at least 1937. Similarly, Kunst Brothers of San Francisco made 19 seven different purchases of white lead from ARCO between 1931 and 1935, and advertised 20 white lead for sale in the Oakland Tribune on six occasions between March 1934 and October 21 1935. (Tr 1680:2-26, 2024:3-21; P01; Tr. 1682:1- 1683:4, 1683:6-22; P258; P259; P260.) 22 Ledgers show that ARCO supplied lead pigments to paint manufacturers that sold paint 23 nationally, including DuPont and Glidden. (Tr. 2024:23-2025:2.) ARCO continued to produce, 24 promote, and sell dry white lead and white lead-in-oil until the July 1946. From November 25 1936 through at least the end of 1938, ARCO continued its paint trade advertising campaign. 26 (P285 002 – P285_003; P01.) 27 In 1940, ARCO published a brochure entitled “The Story of Anaconda Electrolytic 28 White Lead.” The brochure promoted ARCO’s white lead-in-oil to homeowners, noting that it

1 produces “an all-round paint of highest quality” and that “[i]nsideor out, Anaconda White 2 Lead surpasses as a decorative medium, yet costs no more.” (P01; Tr. 699:24-27; 873:19- 3 876:1) (emphasis added). 4 In a memorandum filed with the Federal Trade Commission on October 2, 1946, 5 ARCO stated that it manufactured and sold white lead pigments from 1919 to 1946. (P258 at 1- 6 3.) 7 ARCO admitted that it solicited business on the west coast and had warehouses in Los 8 Angeles, San Francisco, and Oakland that shipped lead pigments to customers in the immediate 9 vicinity, including San Jose, Berkeley, Hayward, Long Beach, Pasadena, Glendale, Burbank, 10 Hollywood, and San Diego. (P258 at 4, 7.) 11 ARCO had a business location (not a retail establishment) in San Francisco, listed in 12 the San Francisco City Directory in 1923. (Tr. 1679:14-19.) 13

14 3. ConAgra manufactured, promoted and sold lead pigment and paint

15 for home use in the Jurisdictions 16 ConAgra acquired Phoenix White Lead and Color Works in 1894 and the RN Mason 17 Company in 1928. ConAgra manufactured lead pigments for use in house paints from 1894 18 until 1958 and manufactured, promoted and sold lead paint in California from 1894 until 1948. 19 (Tr. 653:22-661:3; 1667:25- 1668:19, 1663:27-1664:19.) ConAgra’s plant in San Francisco 20 was moved in 1898 to South San Francisco and was the biggest paint factory west of the 21 Mississippi River. By 1919, ConAgra shipped an average of 200 tons of lead paint daily from 22 its South San Francisco plant to retailers throughout California for use in homes. (Tr. 1666:25- 23 1667:4; Ex. 183) ConAgra also produced lead pigment for use in house paints and sold some of 24 those paints at its Los Angeles factory. (Barnard at 30:15-30:25; Tr. at 1666:25-1667:4.) 25 Neal Barnard, a former ConAgra employee who developed paint formulas for the 26 company from 1948 until 1967, testified that ConAgra used white lead from NL in its paints. 27 (Barnard at 7:15-21.) ConAgra sold 280 tons of white lead to SW for use in lead paint in 1956 28 and 1957. 658:24-659:9; P204.)

1 ConAgra had a significant presence (under the Fuller name) in the residential lead paint 2 market in each of the jurisdictions during the 20th century. (Tr. 1667:9-12, 1675:4-8.) ConAgra 3 had locations in each of the Jurisdictions where its lead house paints were sold. (Tr. 1667:9- 4 12.) The following chart summarizes ConAgra’s history of advertisements, stores, and dealers 5 in the Jurisdictions during the time that it manufactured, promoted and sold lead paint for home 6 use.

Jurisdiction

Earliest Store, Branch or Dealer

No. of Stores, Branches, & Dealers

Alameda (with Oakland)

1894

Over 164

Oakland

1894

Over 100

Los Angeles

1894

23

Monterey

1922

Over 20

San Diego

1894

Over 25

San Francisco

1894

Over 200

San Mateo

1921

Over 50

Santa Clara

1902

Over 75

Solano

1920

Over 10

Ventura Co.

1923

Over 10

7 8 9 10 11 12 13 14 15 16 ConAgra extensively advertised lead paint for home use in the Jurisdictions. (P233.) 17 ConAgra’s promotional materials included booklets and other materials promoting lead paint, 18 as well as commercial jingles that aired on local radio. (Tr. 646:3-25.) ConAgra newspaper 19 advertisements instructed consumers to use lead paint on their homes, including the exteriors, 20 and some ads featured the full line of ConAgra paints at a time when ConAgra sold lead paints. 21 (Tr. 1674:24-1675:2.) 22

23 4. Du Pont manufactured, promoted, and sold lead pigment and lead paint for home use in the Jurisdictions

24 DuPont acquired Harrison Brothers and Cawley Clark & Company in 1917 and sold 25 lead paint from 1917 until the 1960s. (Tr. 1651:22-1652:2; 1656:24-1657:7.) DuPont 26 27 manufactured its own lead pigment from 1917 to 1924. One of its lead pigment manufacturing 28 facilities was located in South San Francisco. (1651:22-1652:9.) After 1924, DuPont contracted with NL for lead pigment for use in its paints. DuPont provided NL with the raw

1 materials, instructions, and packaging needed to manufacture lead pigment that met DuPont’s 2 needs. (Tr. 1656:24-1657:7.) 3 DuPont had a presence in the residential lead paint market in each of the Jurisdictions 4 in the 20th century. (Tr. 1663:18-22.) DuPont’s lead pigment was sold in California as early as 5 the late 1910s. By 1919, DuPont’s national trade journal advertisements for lead pigment listed 6 sales agents for Los Angeles and San Francisco. (Tr. 885:19-39; 886:13-27; 888:17-24; 7 2970:7-2971:3; P177; P2 34.) 8 DuPont had dealers and stores selling its lead paint for home use in each of the 9 Jurisdictions. (1662: 14-17.) The following chart summarizes DuPont’s history of 10 advertisements, stores, and dealers in the Jurisdictions during the time that it manufactured, 11 promoted and sold lead paint for home use. 12

Jurisdiction

EarliestAd

Earliest Store or Dealer

No. of Stores & Dealers

Alameda Co. (with Oakland)

1927

1942

Over 130

Oakland

1927

1942

Over 30

Los Angeles Co.

[No info]

1929

5

Monterey Co.

1926

[No info]

Over 25

San Diego City

1926

[No info]

Over 20

San Francisco

1927

1929

Over 100*

San Mateo Co.

1927

[No info]

Over 80

Santa Clara Co.

1927

[No info]

Over 100

Solano Co.

1927

[No info]

Over 20

Ventura Co.

1946

1946

5

13 14 15 16 17 18 19 20 21 22 DuPont advertised lead paint for home use to paint dealers, consumers, and master 23 painters in the Jurisdictions. (Tr. 644:11-21) The number of DuPont advertisements for lead 24 paint increased from the 1920s through the 1960s. Approximately 1,271 DuPont ads instructed 25 consumers and painters to use lead paint in homes for interior or exterior use or promoted full- 26 line dealers. Full- line dealers sold lead paint as well as lead-free paint in the Jurisdictions. (Tr. 27 1663:3-1663:17, 2012:27-2013:4) DuPont advertised lead paint for home use without telling 28 purchasers that the paint contained lead. For example, DuPont manufactured and promoted

1 lead paints, including No. 39 Primer, in California through the 1960s. DuPont’s expert paint 2 chemist, Dr. Lamb, testified that the No. 39 Primer that DuPont promoted in the Oakland 3 Tribune on March 30, 1961 had approximately 140,000 parts per million of lead. (Tr. 2012:22- 4 26; 2014:8-2015:14; 2967:5 to 2868:8.) 5

6 5. NL manufactured, promoted and sold lead pigments and lead paint for home use in the Jurisdictions

7 NL manufactured lead pigment from 1891 to 1978 and was the largest American 8 manufacturer, promoter and seller of lead pigments for use in house paint. (See Federal Trade 9 Com. v. Natl. Lead Co. (1957) 352 U.S. 419, 424.) NL regularly sold lead pigments to paint 10 11 manufacturers in California from 1900 to 1972 and had a substantial presence in the residential 12 lead paint market in the Jurisdictions during the 20th century. (Tr. 1647: 21-1648:5; 1648:9- 13 1649:2; 1651:13-21.) NL operated lead pigment manufacturing plants in San Francisco and 14 Los Angeles and a warehouse in Oakland. (Markowitz, 1647:21-1648:5; Stipulation Exhibit 2.) 15 NL’s dry white lead was available for sale in the Jurisdictions from 1900 to 1972. 16 (Stipulation 46.) In 1941 alone, NL sold 528,000 pounds of dry white lead to customers in Los 17 Angeles and 60,000 pounds of dry white lead to customers in the City of Palo Alto. 18 (Stipulations 35-36.) And between 1920 and 1941, NL’s San Francisco branch sold 82,674 19 tons of white lead-in-oil. (Stipulations 12-33). 20 From 1900 to 1972, NL promoted its lead paints in the Jurisdictions. During that time, 21 NL regularly advertised its lead paints for home use in local newspapers in the Jurisdictions 22 and in national magazines that reached consumers in the Jurisdictions. (Stipulation 39-40; 23 P233; Tr. 1649:3-20; 1651:13-21.) NL also advertised its lead paints for home use in trade 24 journals directed to the paint manufacturing industry. (Stipulation 41.) Finally, NL regularly 25 marketed and promoted its white lead-in-oil (paste) for home use in the Jurisdictions from 26 1900 to 1972. (Stipulations 47-48.) 27 Because NL had been formed by the acquisition of over 50 competitors between 1891 28 and 1935, NL used the Dutch Boy image as a unifying symbol for the company and its white

1 lead-in-oil and dry white lead products. (Tr. 639:7-19; 640:27-641:25; P82.) Various Dutch 2 Boy house paints manufactured by NL that contained white lead carbonate were marketed, 3 promoted, and sold in the Jurisdictions from 1940 to 1972. (Tr.1648:16-26.) In its handbook on 4 painting, NL promoted lead pigments for use on the interiors of homes and instructed 5 consumers on how to apply it. (Tr. 1650:22-1651:12; P140.) 6

7 6. SW manufactured, promoted, and sold lead pigment and paint for home use in the Jurisdictions

8 SW manufactured lead pigments for use in house paints from 1910 to 1947. It 9 manufactured paints with lead pigments from 1880 through the 1970s. SW was a member of 10 11 the LIA from 1928 through May 1947 and was a Class A member of NPVLA from 1933 12 through 1981. (Tr. 1626:15-23.) The following facts regarding SW are relevant: 13 ? SW sold lead paint as early as 1880, and despite knowing the hazards of lead paint at least as 14 early as 1900, SW sold lead paint until 1972. (Tr:1626:15-23; 1644: 22-24.) 15 ? Between 1886 and 1943, SW used over 160,000 tons of white lead. (Stip. 187.) 16 ? From 1910 to at least 1947, SW also manufactured lead pigment. (Tr. 1626:15-23.) 17 ? SW had a substantial presence in the residential paint market in the Jurisdictions throughout 18 the 20th century. Between 1930 and 1933 alone, SW distributed approximately 3,091,484 19 pounds of lead pigment to its warehouses and factories in San Francisco, Oakland, and Los 20 Angeles. (Tr. 1627:25-1628:5; 1646:20-1647:2; Stips. 166, 190-202.) 21

SW also had two manufacturing plants in California: one in Emeryville (Alameda County)

22 and one in Los Angeles. Both produced lead house paints for sale in California. (Tr. 1627:14- 23 24.) 24

SW had stores and dealers in each of the Jurisdictions selling its lead house paints. (Tr,

25 1627:25-1628:5, P234.) 26

The following chart summarizes SW’s history of advertisements, stores, and dealers in

27 the Jurisdictions during the time that SW manufactured, promoted and sold lead paint for home 28 use.

Jurisdiction

Earliest Ad

Earliest Store or Dealer

No. of Stores & Dealers

Alameda (with Oakland)

1907

1924

Over 55

Oakland

1907

1924

Over 30

Los Angeles

[No info]

1892

75 by 1915 alone

Monterey

1925

1947

Over 25

San Diego

1922

1892

20

San Francisco

1906

1901

Over 50

San Mateo

1903

1947

2

Santa Clara

1913

1945

Over 45

Solano

1921

1958

Over 12

Ventura

1929

1946

10

1 2 3 4 5 6 7 8 9 (Tr. 1629:4-16, 1630:4-10, 1636:14-19, 1638:25 – 1639:1, 1639:7-16, 1639:20-28, 1640:3-11, 10 1640:15-25, 1640:28-1641:8, 1641:17-22, 1641:9-16, P234.) 11 SW was one of the first companies to engage in national advertising and to establish an 12 advertising department to promote its paints. According to SW, its national advertising 13 campaigns reached four out of five families in the United States and virtually all of their 14 dealers’ localities. (Tr. 638:6-639:1; 638:6-639:1; Stip. 155-156.) SW ads appeared in the 15 Jurisdictions in each decade from the 1900s to the 1970s. (Tr. 1645:19-1646:6; P234.) SW 16 extensively advertised lead paint in the Jurisdictions and instructed consumers in those 17 Jurisdictions to use lead paint on interior and exterior surfaces of their homes. (Tr. 1630:22- 18 1631:8.) 19 SW also advertised a full line of paints, some of which contained lead. SWP paint was 20 the most prominent SW product that contained lead and was available in the Jurisdictions. 21 More homes were painted with SW house paint than any other competitor’s. (Tr. 1642:19-26.) 22 SW advertised price quotes for lead-in-oil that it manufactured and sold. These quotes 23 appeared in California newspapers, including the San Francisco Examiner, Los Angeles 24 25 Examiner, and OaklandTribune. (Tr. 3058:28-3061:17; P522; P523.) SW’s national and 26 California-specific advertising campaign sponsored local ads to help local dealers in California 27 promote its paints. (Tr. 637:8-14; 637:26-638:5.) Because SW’s ads did not always clearly 28

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 identify whether its paints contained lead, consumers would not know whether a particular 2 paint contained lead. (Tr. 2032:14-2033:3.) 3 SW also acquired a number of companies that sold and promoted paints containing lead 4 pigments in the Jurisdictions. It acquired Martin-Senour Company in 1917, Detroit White Lead 5 Works in 1917, Acme White Lead & Color Works in 1920, The Lowe Brothers Company in 6 1929, W.W. Lawrence & Co. in 1929, and a partial interest in John Lucas & Co. in 1930, 7 followed by the full acquisition in 1934. These companies sold house paints containing lead 8 pigments in addition to SW’s own house paints containing lead pigment. (Tr 1626:24-1627:10, 9 1638:13-23; 1643:6-1644:21; Stips. 158-165, P282 4.) 10

11 O. Defendants promoted lead paint even though alternatives were available

12 Durable, marketable alternatives to lead paint existed by the early 1900s. (Tr. 578:23- 13 579:6 [discussing P91 at 9], 1624:21-1625:6, 1949:23-1950:5, 1972:26-1973:9, 2039:6-12 14 3104:23-3105:13; Stip. 183 with SW.) When various countries banned lead paint during the 15 1920s and 1930s, these non-lead-based alternatives were used in place of lead paint. (Tr. 16 1702:20-1703:14; P142 at 9.) By the 1910s, SW itself made what it considered to be durable, 17 quality exterior house paint that did not contain lead. DuPont likewise made a safe, durable 18 paint that did not contain lead by the 1910s. (Tr. 858:16-24, 2010:14-2011:3, 2037:23- 19 2039:12, 3103:25-3104:5, 3105:4-25.) Each Defendant was aware that these alternatives 20 existed, but nonetheless persisted in promoting lead pigment and paint. (Tr. 860:17-26; 889:24- 21 22 890:11; 891:26-892:12 [discussing P5 at 3]; 1624:21-1625:6; 1705:2-20; 1715:11-26 [relying 23 on P177]; 1951:9-1952:6 [discussing P150 at P27]; 1972:26-1973:9; 2012:27-2013:15 [relying 24 on P233 & P269]; 3104:23-3105:13.) 25

VI. SUMMARY OF THE DEFENDANTS’ ARGUMENTS

26 Although each defendant asserts specific defenses, the following are common to all, 27 some of which are dealt with earlier in this decision: 28

Even if there was some knowledge lead was dangerous, but in the context of

14

workplaces, not home paint

15 The Court finds this is not a credible defense; the link between workplace exposure and 16 harm and residences is obvious. 17 18 ? Defendants could not have been expected to have such knowledge when the 19 leading authorities in medicine and government didn’t say there was such a 20 hazard (e.g., higher BLLs were the norm by government standards) 21 As the Court of Appeals stated: “The fact that the pre-1978 manufacture and distribution 22 of lead paint was ‘in accordance with all existing statutes does not immunize it from 23 subsequent abatement as a public nuisance.’” Appeals Decision at 310. 24 Other defenses asserted: 25 26 ? The “promotion” element as stated in the Appeals Decision has not been 27 satisfied 28

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 ? Assuming older housing is the problem, why has there been such a decline in 2 blood lead levels? Because bad paint is being covered, and intact lead paint is not 3 hazardous 4 ? No market share analysis done, so how can these five defendants be held liable 5 for all purveyors of paint? 6 ? Incidence of lead poisoning is so low that this is a deminimusproblem not worthy of abatement 7

To the extent it is a problem, the California Legislature has proscribed solution

8

The solution (CLPPS) has worked, and is a great “success story”

9

Local governments have the resources to address the problem but lack the will to

10 do so 11

Proposed remedy too expensive

12

It is the property owner’s responsibility to fix the problem

13

14 VII. INDIVIDUAL DEFENDANTS’ RESPONSES

15 A. ARCO 16 ARCO’s position: 17

1. Knowledge

18 There is no evidence that establishes knowledge by ARCO prior to April 1937 of any 19 health effects to children from exposure to residential lead paint. Exhibit 154 transcript of an 20 April 6, 1937 conference that chiefly addressed occupational lead poisoning among adult 21 22 factory workers but also included limited references to childhood lead poisoning. (TR. 23 1750:11-17, 1764:9-1766:3.) The transcript references two previously published case reports 24 of symptomatic lead poisoning in children with very high blood lead levels; but it says nothing 25 about whether those children ingested lead from paint. (Ex. 154_006-008.) As Plaintiff’s 26 expert acknowledged, one of the published case reports that Dr. Aub described showed that the 27 child had ingested lead from water; the other did not say what the source of the child’s lead 28 exposure was. (TR. 1750:11-17, 1752:1-17, 1752:25-28, 1764:9-1766:3.) People v. Atlantic Richfield Company, et al. 45 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 2. Promotion

2 ARCO’s alleged predecessors ceased all promotion of lead pigment, and left the lead 3 pigment business, decades before research on the risk of low-level exposures in asymptomatic 4 children began to be published in the late 1970s and over a half century before the CDC 5 reduced its “level of concern” to 10 µg/dL and the “reference level” to 5 µg/dL. 6 The evidence fails to show that promotion by ARCO caused application of lead paint 7 on homes within the Jurisdictions. Plaintiffs’ experts supervised an extensive search of 8 newspapers published within the plaintiff Jurisdictions for advertisements promoting any lead 9 paint or pigment products manufactured by any of the defendants. (TR. 1631:22-1632:7, 10 1632:27-1633:6, 1634:1-20, 1976:1-15; Ex. 233.) Significantly, the search yielded no 11 newspaper advertisements promoting Anaconda brand products or purporting to have been 12 13 published on behalf of ARCO at any time. (TR. 1865:21-1866:7, 1866:13-17, 1869:16-22, 14 1870:15-19, 1871:1-6, 1871:17-24.) Thus, no alleged ARCO predecessor promoted lead paint 15 or pigment in the plaintiff Jurisdictions through newspaper advertisements. Nor is there any 16 evidence that ARCO promoted lead paint or pigment at any time through broadcast media, 17 billboards, or point-of-sale advertisements in stores. 18 The sole evidence of promotion by any alleged ARCO predecessor consists of 19 magazine advertisements contained within Exhibit 1, a compendium of documents. Those 20 advertisements break down into two categories: advertisements published before and after the 21 April 1937 conference. 22 Exhibit 1 also includes 51 advertisements promoting Anaconda brand white lead 23 carbonate that appeared before April 6, 1937, in the same journals directed to paint 24 manufacturers and professional painters as the post-April 6, 1937 advertisements, at various 25 times during two brief periods: 1920-22 and 1935-37. (Ex. 1 at 3, 17, 21-25, 27-33, 38-39, 44- 26 89 and 90-115.) These advertisements all pre-date Plaintiffs’ proffered evidence of knowledge 27 by ARCO of any lead risk. These advertisements therefore do not constitute promotion with 28 knowledge. People v. Atlantic Richfield Company, et al. 46 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 There is no evidence that the trade journals that carried them circulated or were read by 2 anyone within California. Plaintiffs offered no evidence, and stipulated that they know of no 3 evidence, identifying anyone who bought or used lead paint on homes in the Jurisdictions or 4 elsewhere in California after reading, seeing or hearing them. (Court Ex. 12 [Stip.], at ¶ 2.)16 5 There is no evidence that these advertisements were effective by any other measure, and no 6 witness testified that they were. 7 The People have suggested that three pieces of evidence show that Anaconda white 8 lead pigment was sold for use in paint for residential applications in California, but the 9 evidence they cite would not support such a finding. They cite (i) advertisements in Drugs, 10 Oils & Paints between February 1921 and November 1921 that list Los Angeles and San 11 Francisco, among 14 other cities outside California, as places where Anaconda Lead Products 12 Company had warehouses (Ex. P001_070-089) (similar advertisements in the same journal in 13 14 later months omit California locations from the list of places where warehouses were 15 maintained), (ii) statements in a memorandum submitted to the FTC (Ex. 285) to the effect that 16 the alleged predecessors’ nationwide system for pricing sales of white lead carbonate included 17 a methodology for determining prices of any sales that might occur in California, and (iii) trial 18 balances from the accounting records of Anaconda Sales Company for fiscal years ending in 19 1931, 1934, and 1935 (Exs. 258-260), which show accounts receivable balances due from 20 various entities, including some in California, but do not make it possible to determine whether 21 the balances arose from sales of white lead or sales of zinc oxide, a non-lead pigment. (TR. 22 1884:23-26, 1885:9-14, 1887:5-14.) 23 Exhibit 1 includes two newspaper advertisements by the DeGregory Paint Company, 24 one from 1940 and another from 1934, advertising unbranded “lead and zinc paste.” (Ex. 25 1_001-002.) These documents do not constitute promotion by ARCO, because there is no 26 evidence that any alleged predecessor placed the advertisements and the advertisements do not 27 28 16 As noted herein stipulations between the parties resolved certain key issues. People v. Atlantic Richfield Company, et al. 47 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 mention the Anaconda brand. (TR. 1891:6-11, 1895:15-26.) Plaintiffs have asserted that 2 DeGregory purchased Anaconda white lead, suggesting that the lead pigment contained in the 3 unbranded “Lead and Zinc Paste” advertised by DeGregory somehow must have been supplied 4 by ARCO. 5 However, the DeGregory advertisements do not identify white lead carbonate as the 6 type of lead pigment contained in DeGregory’s “lead and zinc paste.” Undisputed testimony 7 from an expert witness, Dr. Bierwagen, establishes that there were multiple different types of 8 lead pigments in use in addition to white lead carbonate. (TR. 3077:11-19.) There is no 9 evidence that DeGregory’s “lead and zinc paste” contained white lead carbonate rather than 10 some form of lead pigment that the alleged ARCO predecessors did not sell. Second, Plaintiffs 11 have cited in support of their argument Exhibits 259 and 260, which are trial balances from the 12 accounting records of Anaconda Sales Company. These documents show accounts receivable 13 14 balances due from DeGregory, but they do not establish any sales of white lead carbonate 15 pigment to DeGregory (or to any other paint manufacturer in California) because they show 16 only dollar amounts and do not make it possible to determine whether the balances arise from 17 sales of white lead or sales of zinc oxide, a non-lead pigment. (TR. 1884:23-26, 1885:9-14, 18 1887:5-14.) 19 Exhibit 1 includes six newspaper advertisements for unbranded “pure white lead” by 20 Kunst Bros., a paint retailer in Oakland, dated in 1934 and 1935. These documents do not 21 constitute or establish promotion by ARCO, because there is no evidence that they placed the 22 advertisements and the advertisements do not mention the Anaconda brand. (TR. 1891:6-11, 23 1895:15-17.) There is no evidence that Kunst Bros. purchased white lead from ARCO. See 24 Exhibits 258 and 259. Exhibit 259 is an Anaconda Sales Company trial balance that shows 25 account receivable balances from various companies, including Kunst Bros., but does not say 26 whether the balances arose from sales of zinc oxide or white lead. Plaintiffs’ assertion that it 27 must be one rather the other is speculation. Exhibit 258, a similar document dating from the 28 1931 fiscal year, is irrelevant for the same reason. People v. Atlantic Richfield Company, et al. 48 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 3. Causation

2 The law governing causation requires Plaintiffs to prove that ARCO’s conduct was a 3 “substantial factor” in causing the alleged harm of widespread presence of paint containing 4 white lead carbonate pigment within pre-1978 private residences throughout the plaintiff 5 Jurisdictions. ARCO cannot be held liable for the alleged public nuisance because Plaintiffs 6 presented no evidence that any conduct by ARCO caused any portion of the alleged public 7 nuisance. 8 There also is no evidence that ARCO actually sold white lead carbonate pigment for 9 use in residential paint in California. Plaintiffs conducted an extensive investigation to identify 10 defendants’ stores and dealers in California and found none for any of ARCO’s alleged 11 predecessors. (Ex. 234; see also TR. 1637:3-1638:3 (description of investigation process).) 12 13 The only manufacturing facility for Anaconda White Lead was in Indiana (Ex. 14 285_002-003), putting Anaconda White Lead at a competitive disadvantage for any California 15 sales compared to white lead brands manufactured by companies with California plants. 16 Anaconda White Lead also was a late entrant into the market, attempting to sell its product at a 17 time when demand overall was decreasing. The summary of the history of U.S. white lead 18 production since 1884 proffered by Dr. Mushak shows that most white lead carbonate was 19 produced in the decades before 1920 and that the peak year was 1922, just two years after 20 Anaconda White Lead began to be produced. (SeeEx. 230.) Dr. Mushak’s chart shows, and 21 Dr. Rosner agreed, that white lead production declined thereafter so rapidly that by the late 22 1930s total white lead production was only half of what it had been in the early 1920s. (Ex. 23 230; TR. 711:11-20, 742:15-18, 760:10-13.) 24 Each of the above-listed items of evidence is at most consistent with, but not probative 25 of, the possibility that ARCO sold some white lead carbonate pigment in California for some 26 purpose. That is not enough to permit the inference that such sales occurred. A permissible 27 inference is “more than a surmise or a conjecture,” and “cannot be based on mere possibilities; 28 People v. Atlantic Richfield Company, et al. 49 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 it must be based on probabilities.” Aguimatang v. Calif. State Lottery, 234 Cal. App. 3d 769, 2 800 (1991) (citations omitted). 3 Even if the Court were to infer that some sales of Anaconda white lead carbonate 4 pigment occurred in California, that would not establish a factual link between ARCO and the 5 alleged public nuisance, which consists of paint containing white lead carbonate pigment that 6 is now present in homes. 7 Plaintiffs stipulated that they had no such evidence that: (i) such pigment was used to 8 make paint rather than a non-paint product (such as ceramics); (ii) the paint was applied to one 9 or more residences within the plaintiff Jurisdictions rather than to some other structure that is 10 not part of this case; and (iii) the residence(s) to which it was applied are still standing. 11 12 B. ConAgra 13

ConAgra’s position:

14

15 1. Knowledge

16 With regard to ConAgra the People rely on Pigeon v. W. P. Fuller & Co., 156 Cal. 691 17 (1909), (Ex. 184), a 1919 newspaper article describing a tour of Fuller’s South San Francisco 18 plant which references precautions taken to protect workers from “poisonous” dust created 19 during the process of converting pig lead into white lead carbonate (Ex. 183), and Fuller’s 20 membership in LIA and NPVLA. 21 22 ConAgra argues Pigeon is distinguishable. As described in Ex. 183 and Ex. 184, work 23 in a white lead factory was a dangerous occupation which exposed workers to enormous 24 quantities of lead through a “melting,” “grinding,” and “pulverizing” process which generated 25 lead dust, fumes and vapors. Workers inhaled fumes and dust with quantities of lead sufficient 26 to cause “loss of teeth, paralysis and derangement of the digestive organs.” (Ex. 184.006.) 27 ConAgra asserts it was not proven at trial that anyone connected the workplace hazard to 28 residences.

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 As to membership in the LIA or the NPVLA, there is no evidence that any Fuller 2 representative attended meetings of either trade association where such information was 3 purportedly disclosed. (TR. 785:6-14 [Rosner].) The trade association meeting minutes 4 introduced by the People demonstrate that Fuller was not in attendance. (Ex. 104, Ex. 107, Ex. 5 6 108, Ex. 112, Ex. 114.) Nor did the People establish that Fuller acquired any knowledge from 7 the meeting minutes or other writings issued by the LIA or NPVLA, as there is no evidence 8 that any representative of Fuller actually received and reviewed any such documents, much 9 less a representative with sufficient authority to impute knowledge to Fuller. 10 The People did not prove that Fuller had any direct knowledge of the substance of 11 relevant medical/scientific literature. They were not widely circulated. If at all, the literature 12 was available for review only in medical libraries and locatable only through the use of an 13 “index medicus.” (TR. 1185:14-23 [Kosnett].) 14 The pre-1950 medical/scientific literature did not describe childhood lead poisoning 15 from deteriorated lead paint and/or dust. Rather, the literature primarily involved lead 16 poisoning from high doses of lead as a result of chewing on objects such as cribs, toys and 17 children’s furniture and were viewed by the public health professionals of the times as related 18 to a behavioral abnormality called “pica.” (Ex. 1004; Ex. 1382; TR. 2664:23-2666:18; 19 2671:26-2674:22 [English].) 20

2. Promotion

21 22 For example, Ex. 233 purports to be a summary of the number of “Newspaper 23 Advertisements by Defendants” in each Jurisdiction during the time period 1900-1972. For 24 Fuller, the summary reported a total of 2,086 advertisements. However, the schedule 25 supporting Ex. 233 identified 715 Fuller-related advertisements. The People subsequently 26 offered Ex. 268, which was a collection of 515 Fuller-related advertisements. (TR. 1980:25- 27 1982:19 [Markowitz].) 28 Dr. Markowitz acknowledged that many of the advertisements did not promote lead People v. Atlantic Richfield Company, et al. 51 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 paint, but were for the purpose of “getting people to come into the store.” (TR. 1801:3-4 2 [Markowitz].) Still other advertisements simply promoted the Fuller brand, and not any 3 particular lead-based paint product. (TR. 1794:22-1795:10 [Markowitz].) Dr. Markowitz also 4 included advertisements by retail stores, with no evidence linking Fuller’s involvement in the 5 content or placement of those advertisements. (TR. 1800:21-1801:25 [Markowitz].) He 6 included an advertisement run by a lumberyard in 1965 (after Fuller stopped producing lead 7 paint) based on speculation that the stores may have had “leftover stock.” (Id.) 8 Over the 72-year period embraced by the historical research of Dr. Markowitz, there 9 were 300 advertisements which appear to have been placed by Fuller (as opposed to a third 10 party) and which reference a product that may have contained lead. A schedule summarizing 11 the number of advertisements by decade is as follows: 12

Decade

Fuller Ads in Ex. 268 Purporting to Relate to a Lead-based Paint

1900s

3

1910s

11

1920s

258

1930s

20

1940s

7 (exterior paint)

1950s

1 (export)

1960s

0

1970s

0

Total

300

13 14 15 16 17 18 19 20 21 22 Based on the record, there was minimal advertising activity by Fuller after the 1930s, 23 and none related to interior lead paint. While Dr. Markowitz testified that the advertisements 24 contained in Exhibit 233 were only a representative sample, the People presented no other 25 evidence relating to Fuller’s advertisements. 26

27 3. Causation

28 The People offered no evidence to establish that Fuller’s advertising activity was a

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 substantial factor in causing the alleged public nuisance. There is no basis in the record to 2 conclude that Fuller’s advertisements were a “but-for” cause of the presence today of lead in 3 the more than 4.7 million homes located throughout the geographical limits of the Jurisdictions 4 that are presumed to have lead paint.

5 4. Laches

6 The doctrine of laches is applicable to claims brought by public entities. See, e.g., City 7 and County of San Francisco v. Pacello, 85 Cal.App.3d 637 (1978); Peoplev. Department of 8 Housing & Community Dev., 45 Cal.App.3d 185 (1975). As the Department of Housing court 9 explained, “[w]hen the government is a party, invocation of…laches…rests upon the belief that 10 government should be held to a standard of ‘rectangular rectitude’ in dealing with its citizens.” 11 Department of Housing, 45 Cal.App.3d at 196. 12 Laches is also available in public nuisance cases brought by public entities. City and 13 County of San Francisco v. Pacello, 85 Cal.App.3d 637 (1978). California Civil Code Section 3490 does not alter this result. By its express language, this section applies only to those public 14 nuisances that amount to “actual obstruction[s] of a public right.” Cal. Civ. Code § 3490. 15 Here, by the People’s own admission, the requested abatement relates solely to private 16 residential properties. (May 3, 2012 Joint Stipulation Regarding Buildings at Issue.) 17 Accordingly, Section 3490 does not apply to this case. 18 Courts have not barred application of the laches defense in cases concerning the 19 enforcement of a defined governmental policy. Rather, the cases have balanced the 20 governmental interest against the impact on the private litigant. Pacello, 85 Cal. App. 3d at 21 646. In People v. Department of Housing & Community Dev., 45 Cal. App. 3d 185 (1975), the 22 People brought a mandamus action against the department for failure to fulfill the requirements 23 of the California Environmental Quality Act before issuing a permit. Id. The People sought to have the permit rescinded. Id. Even though the 180-day statute of limitations on the suit had 24 not yet run, the trial court found that the action was barred by laches. Id. The finding was 25 upheld on appeal. Id. The appellate court noted the strong public policy for environmental 26 protection, but found that the presence of public interest was not a bar to equitable defenses. 27 Id. Instead, a weighing process would ascertain whether the injustice to be avoided was 28 sufficient to counterbalance the effect of the defense upon a public interest. Id.People v. Atlantic Richfield Company, et al. 53 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 Similarly, the California Supreme Court in City of Long Beach v. Mansell, 3 Cal. 3d 2 462, 496-497 (1970), emphasized that private litigants are not categorically precluded from 3 asserting equitable defenses, including laches, against a governmental entity, even when the 4 governmental action purportedly promotes a policy adopted for public protection. Id. The Mansell court adopted the following balancing principle: 5 6 The government may be bound by an equitable estoppel in the same manner as a private party when the elements requisite to such an estoppel against a private 7 party are present and, in the considered view of a court of equity, the injustice which would result from a failure to uphold an estoppel is of sufficient dimension 8 to justify any effect upon public interest or policy which would result from the raising of an estoppel. 9 10 Id. at 496-497 11

C. DUPONT

12

DuPont’s position:

13

1. History relevant to DuPont

14 Only DuPont paint products that were available for sale in California are relevant in 15 16 this case. (Ex. 2012, ¶ 3.) DuPont’s white lead-in-oil was never identified or listed as 17 available for sale in any California newspaper or California hardware catalog identified by the 18 parties. (Ex. 2012, ¶ 11.) The parties have stipulated that DuPont’s interior residential paint 19 products never contained white lead pigments. (Ex. 2012, ¶¶ 26-39; see also TR. 2609:11-19 20 [Lamb].) 21 As noted above, DuPont entered the paint business in 1917 when it acquired Harrisons, 22 Inc. (“Harrisons”). (Ex. 2012, ¶ 1.) In 1917 DuPont also acquired Cawley Clark & Company 23 (“Cawley Clark”), a manufacturer of high-grade colorants for paint. (TR. 2909:21-2910:3 24 [Bugos].) Together Harrisons and Cawley Clark owned Beckton White, a manufacturer of 25 lithopone, a lead-free white pigment used for interior residential paints. (TR. 2909:13-2910:3 26 [Bugos].) Due to these acquisitions, by 1918 DuPont was the country’s largest manufacturer 27 of lithopone. (TR. 2918:1-21 [Bugos].) DuPont later became the country’s and then the 28

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 world’s largest manufacturer of titanium dioxide, another lead-free white pigment used for 2 interior and, later, exterior residential paints. (Ibid.) 3 DuPont manufactured white lead carbonate from March 1917 until December 1924 at 4 only one plant, in Philadelphia, Pennsylvania. (Ex. 2012, ¶ 4.) DuPont acquired the 5 Philadelphia plant when it purchased Harrisons; Cawley Clark never manufactured white lead 6 pigment. (TR. 2909:13-2910:3 [Bugos].) 7 After acquiring Harrisons, Cawley Clark, and other companies starting in about 1917, 8 DuPont attempted to establish its paint and pigment businesses. (TR. 2913:17-2915:19 9 [Bugos].) Neither business was initially profitable (TR. 2915:10-19 [Bugos]) and the company 10 was nearly out of the white lead pigment business four years after it acquired Harrisons (Ex. 11 1297; TR. 2922:10-19 [Bugos]). DuPont ceased manufacturing any white lead carbonate 12 pigment by the end of 1924. (Ex. 2012, ¶ 4.) 13 14 Because it was focused on pigments other than white lead, DuPont did not join LIA 15 until 1948, 20 years after that trade association was formed. (Ex. 2012, ¶ 18; TR. 2929:12-27 16 [Bugos].) DuPont joined the LIA due to products unrelated to white lead pigment or lead 17 paint. (TR. 2929:12-24 [Bugos].) DuPont was not a member of any of the LIA’s White Lead 18 Committees and did not participate in any way in the LIA’s White Lead Promotion Campaigns 19 or Programs or the LIA’s Forest Products – Better Paint Campaign. (Ex. 2012, ¶¶ 20-24; TR. 20 2929:12-27 [Bugos].) DuPont was a member of NPVLA from 1933 through 1972 (Ex. 2012, ¶ 21 16), but NPVLA promoted only the use of paint generally and did not affirmatively promote 22 white lead pigment or lead paint (TR. 834:22-835:3 [Rosner]; 2928:23-2929:5 [Bugos]). 23

24 2. Knowledge

25 Dr. Markowitz testified that DuPont did not possess any secret or otherwise non-public 26 knowledge concerning risks posed by residential lead paint. (TR. 1773:14-20.) To the 27 contrary, the first evidence offered by the People of DuPont being informed that children were 28 being harmed by lead paint in their homes was a 1937 letter from the Baltimore, Maryland People v. Atlantic Richfield Company, et al. 55 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 health department. (Ex. 159; TR. 1716:13-19 [Markowitz].) That letter referred solely to 2 children being harmed by eating paint off cribs, and did not mention interior or exterior 3 residential surfaces. (Ibid.) The City requested DuPont’s help in obtaining information about 4 alternative, lead-free paints for repainting children’s furniture, including cribs (ibid.), and 5 DuPont offered to look into developing such paints. (TR. 1861:28-1862:3, 1862:24-1863:26 6 [Markowitz].) In fact, DuPont already offered a lead-free paint for those purposes at that time, 7 as part of its Duco line. (TR. 1863:27-1865:8 [Markowitz]; Ex. 2012, ¶ 34.) 8

9 3. Promotion

10 Dr. Markowitz offered a general opinion that DuPont promoted lead paint in California 11 (TR. 1624:21-1625:11), based upon a collection of 1,271 advertisements pertaining to DuPont. 12 (TR. 1663:9-11.) In that collection, Dr. Markowitz included advertisements that (i) referred to 13 lead paint explicitly (such as through use of the word “lead”); (ii) referred to a paint product 14 containing white lead pigment; (iii) referred to a paint line that included a paint product 15 containing white lead pigment; or (iv) referred to any other residential paint product (i.e., those 16 that did not contain any white lead pigment). (TR. 1794:22-1795:10.) 17

18 (a) Advertisements

19 First, advertisements that did not refer to a paint product that contained white lead 20 pigment or a line with such a product are irrelevant to this case. Dr. Markowitz speculated that 21 such advertisements for non-lead paint products might induce a consumer to visit a store, 22 where he or she might see promotional materials for a lead paint. (TR. 1839:22-27.) But Dr. 23 Markowitz admitted he has seen no such in-store promotional materials for DuPont. (TR. 24 1840:21-1841:4.) 25 Second, Dr. Markowitz lacked the knowledge to separate advertisements that referred 26 to lead paints, or lines with lead paints, from advertisements for non-lead paint products. 27 (TR. 1831:3-1839:21, 1842:26-1843:1.) Dr. Markowitz could not state how many 28 advertisements in his collection actually referred to a DuPont paint product that contained People v. Atlantic Richfield Company, et al. 56 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 white lead pigment. (TR. 1839:17-21, 1843:2-7.) Because Dr. Markowitz was unable to 2 separate potentially relevant from irrelevant advertisements, there is no support for his opinion 3 that DuPont promoted residential lead paint. 4 Third, Dr. Markowitz did not exclude advertisements placed by third parties, such as 5 painters or dealers. (TR. 1841:10-17, 1842:1-4, 1843:8-11.) Dr. Markowitz did not identify 6 any California newspaper advertisement as placed by DuPont, rather than a third party. 7 DuPont’s expert paint chemist, Dr. Lamb, reviewed Dr. Markowitz’s collection of 8 1,271 advertisements between 1900 and 1966 and determined that only 130 of the 9 advertisements referred to a DuPont paint product that contained white lead pigment or a paint 10 line including such a product. (TR. 2834:7-13.) This testimony was uncontroverted. 11 Of the 130 advertisements identified by Dr. Lamb, only two advertisements used the 12 word “lead.” (TR. 2834:17-2835:3.) The remainder referred to an exteriorresidential paint (or 13 14 paint line) that contained some amount of white lead pigment, but did not discuss lead or tout 15 its virtues. Dr. Lamb organized these advertisements into a chart displaying the number in 16 each Jurisdiction, by decade. (Ex. 1408.1; TR. 2833:18-2834:13.) Dr. Markowitz’s collection 17 included no such advertisements in Ventura County and only one advertisement (during a 18 period of 66 years) in Monterey and Solano Counties. (Ex. 1408.1.) There were just seven 19 advertisements found in Santa Clara County and eight in San Mateo County and the City of 20 San Diego. (Id.) Los Angeles County, the largest Jurisdiction, had just 13 such 21 advertisements, and only three after 1930. (Id.) The only Jurisdictions where more than 22 20 advertisements were found that referred to a DuPont paint product or line containing white 23 lead pigment were Alameda County and the City of Oakland, which shared the Oakland 24 Tribune. (Id.) And only nine such advertisements were found after 1950. (Id.) 25

26 (b) White Lead Pigment and Sales

27 The People contend that DuPont sold white lead pigment to paint manufacturers in 28 California. The People referred to DuPont as part of the “white lead pigment industry” (TR. People v. Atlantic Richfield Company, et al. 57 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 26:4-6.), referring to a 1940s Federal Trade Commission enforcement action that ultimately 2 reached the United States Supreme Court. (Ibid.) But DuPont was not a party to that 3 enforcement action and the People’s statement that DuPont was part of “the white lead pigment 4 industry” finds no evidentiary support in the record. (See Ex. 517.) The People tacitly 5 acknowledged the point in cross-examination of Defendants’ medical historian, Dr. English, 6 when their counsel referred to 1930s meetings of the “lead paint industry” that did not include 7 DuPont. (TR. 2711:13-2712:23, 2716:7-25.) It was stipulated that DuPont did not join the 8 LIA until 1948, 20 years after it was founded, and did not participate in any of the LIA’s white 9 lead pigment promotional campaigns. (Ex. 2012, ¶¶ 18, 20-24.) And Dr. Markowitz conceded 10 on cross-examination that there is only a “theoretical possibility” that DuPont sold white lead 11 pigment for use in residential paints in the Jurisdictions. (TR. 1850:28-1851:13.) 12 DuPont had no dealers in any of the Jurisdictions until 1924. (TR. 1659:9-1661:21 13 14 [Markowitz].) DuPont had a branch office in the Old Chronicle Building in San Francisco that 15 was able to handle inquiries for a wide variety of products, but it was stipulated there is no 16 evidence that DuPont’s office in the Old Chronicle Building in San Francisco was a retail 17 establishment for any product, including pigment or paint. (Id., ¶ 13.) 18 The People’s historian, Dr. Markowitz, testified that DuPont advertised white lead 19 carbonate pigment as available for purchase in San Francisco, through L.H. Butcher, from 20 1918 through 1920. (TR. 1657:8-1658:8.) The People’s sole evidence is trade journal 21 advertisements; the People presented no documentary evidence of any such sale by DuPont and 22 identified no alleged DuPont customer. The People also presented no evidence that the trade 23 journal in which the advertisements appeared was circulated in California. The People 24 reviewed newspaper advertisements in the Jurisdictions during this time period, but found no 25 advertisement for any DuPont paint product before 1924. (TR. 1659:9-1661:21, 1827:24- 26 1828:9 [Markowitz].) On cross-examination, Dr. Markowitz testified that he had identified 27 only a “theoretical possibility” that DuPont ever sold white lead carbonate in California and 28 had no proof of any actual sale. (TR. 1850:28-1851:13.) People v. Atlantic Richfield Company, et al. 58 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 DuPont’s historian, Dr. Bugos, testified concerning the same trade journal 2 advertisements. Dr. Bugos explained that his review of the historical record revealed that 3 Cawley Clark had a business relationship with L.H. Butcher prior to DuPont’s acquisition of 4 Cawley Clark in 1917 and that the relationship continued through 1920. (TR. 2931:21- 5 2932:3.) Dr. Bugos testified that the scope of L.H. Butcher’s representation was limited to 6 colored pigments and lithopone. (TR. 2931:17-2932:3). As Dr. Bugos explained, “the 7 relationship with Cawley Clark was always with Butcher and Butcher with Cawley Clark.” 8 (Ibid.) 9 When DuPont advertised white lead carbonate alone, as the only product mentioned in 10 an advertisement, L.H. Butcher was not listed in the advertisement as a Pacific Coast 11 Representative. (TR. 2934:20-2935:5, 2936:20-26 [Bugos]; Ex. 1434.) Instead, L.H. Butcher 12 was listed onlyin “coalition advertisements” that included the colored pigments and lithopone. 13 14 (TR. 2932:16-2933:12 [Bugos].) L.H. Butcher’s own advertisements at this time did not state 15 that it had white lead pigment available for sale (whether manufactured by DuPont or someone 16 else). (TR. 2934:28-2935:5 [Bugos].) In addition, the historical record shows that L.H. 17 Butcher sold red lead manufactured by Eagle Picher, one of DuPont’s competitors. (TR. 18 2935:6-15, 2936:9-18 [Bugos]; Ex. 1429.) Dr. Bugos gave uncontroverted testimony that a 19 representative such as L.H. Butcher would not have sold more than one company’s red lead. 20 (TR. 2935:6-15.) As red lead also is listed in DuPont trade journal advertisements that mention 21 L.H. Butcher, it is thus clear that L.H. Butcher did not sell all of the DuPont products listed in 22 those coalition advertisements. As Dr. Bugos testified, there is no reliable historical evidence 23 that L.H. Butcher ever represented in California, much less sold, any white lead carbonate 24 pigment made by DuPont. (TR. 2931:8-2932:3.) 25

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 evidence shows that DuPont never sold or affirmatively promoted an interior residential paint 2 containing white lead pigment in any of the Jurisdictions. The only evidence offered by the 3 People that an interior DuPont residential paint containing white lead pigment was ever 4 allegedly available for sale in any of the Jurisdictions was a June 1919 DuPont Magazine. (Ex. 5 276.) The magazine at issue referred to a paint line called “Harrisons Town & Country.” (TR. 6 2008:27-2009:2 [Markowitz].) 7 As an initial matter, the People stipulated that from 1917 through 1920 the “Harrisons 8 Town & Country” line included a separate exterior paint. (Ex. 2012, ¶ 2 [referring to 9 Harrisons Town & Country Outside White Paint]; see also id. ¶¶ 26-27 [other paints that also 10 were part of Harrisons Town & Country line did not contain white lead pigment].) The name 11 “Harrisons Town & Country” thus referred to a line of paints (i.e., a brand), rather than a single 12 paint intended for both exterior and interior use. Uncontroverted testimony by Dr. Bugos also 13 14 supports this finding. (TR. 2937:8-2939:21.) DuPont’s expert paint chemist, Dr. Lamb, 15 provided uncontroverted testimony that the interiorpaint sold under the “Harrisons Town & 16 Country” brand contained lithopone, rather than white lead pigment. (TR. 2608:26-2609:5, see 17 also TR. 2939:25-2940:2 [Bugos].) 18 In addition, the People offered no evidence that “Harrisons Town & Country” paints 19 were ever available for sale from DuPont in California. DuPont ceased use of the brand name 20 “Harrisons Town & Country” in its paint line in 1920. (Ex. 2012, ¶ 2; TR. 2938:7-14 21 [Bugos].) The People identified no DuPont dealer or advertisement for any DuPont paint 22 product in any of the Jurisdictions before 1924. (TR. 1659:9-1661:21, 1827:24-1828:9 23 [Markowitz].) Accordingly, the “Harrisons Town & Country” line of paints was rebranded 24 four years before DuPont paint products first became available in the Jurisdictions. 25 (TR. 2939:16-21 [Bugos].) For this additional reason, the product is irrelevant to this case. 26 (Ex. 2012, ¶ 3.) 27

28 4. Causation

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Dr. Rosner offered testimony concerning national advertising, both individually and 2 through trade association activities. Dr. Rosner testified that in reviewing DuPont’s national 3 activities, he sought to identify DuPont’s efforts to promote paint generally and did not 4 consider whether the products advertised actually contained white lead pigment. (TR. 805:14- 5 23, 807:15-22.) Dr. Markowitz offered testimony concerning advertising specific to 6 California. Neither witness showed that DuPont intentionally or affirmatively promoted the 7 use of lead paint in or on residences in the Jurisdictions. 8 Dr. Rosner testified concerning national advertising mostly undertaken by DuPont from 9 1918 through 1920. (TR. 644:11-21; Ex. 2 at pp. 12-22.) But the referenced advertisements 10 listed many of the diverse products that DuPont offered at that time, including dozens of 11 products unrelated to paint. (See, e.g., Ex. 2 at pp. 18, 22.) Dr. Rosner could provide no 12 evidence that the “national” magazines in which he had identified DuPont advertisements were 13 14 actually circulated in California. (TR. 811:23-812:7, 813:10-13.) In addition, as discussed 15 previously, the People have not proven that DuPont had a retail presence in California before 16 1924 (TR. 1659:9-1661:21, 1827:24-1828:9 [Markowitz]), so earlier advertisements cannot 17 provide a basis for liability. 18 Dr. Rosner also testified about national promotional campaigns undertaken by the LIA 19 and the NPVLA. However, DuPont did not join the LIA until 1948, was never a member of 20 any of the LIA’s White Lead Committees, and did not participate in any way in the LIA’s 21 White Lead Promotion Campaigns or Programs or the LIA’s Forest Products – Better Paint 22 Campaign. (Ex. 2012, ¶¶ 18-24; TR. 2929:12-27 [Bugos].) The NPVLA national promotional 23 campaigns do not establish that DuPont intentionally or affirmatively promoted the use of lead 24 paint on residential exteriors. 25 The People offered no testimony that any particular advertisement referring to a 26 DuPont paint product was false or misleading. The People’s historian, Dr. Markowitz, testified 27 on redirect that some defendants may have misled consumers because advertisements for lead 28 paint did not state that the paint contained white lead pigment. (TR. 1965:8-17.) But DuPont’s People v. Atlantic Richfield Company, et al. 61 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 historian, Dr. Bugos, offered uncontroverted testimony that DuPont always listed the 2 ingredients of its paints on the can labels. (TR. 2941:22-2942:23; see also Ex. 1428.) 3 Similarly, Dr. Bugos gave uncontroverted testimony that DuPont labeled its residential paint 4 products clearly as being for interior or exterior use. (TR. 2940:3-2941:19.) So, consumers 5 were informed whether a DuPont paint product contained lead and whether it should be used 6 for interior or exterior purposes. 7 The remaining advertisements cannot serve as a basis for liability. Two of the 8 advertisements concern DuPont’s No. 39 House Primer. The evidence shows that product 9 contained just 13.7 percent white lead pigment and was used as a first coat, under a lead-free 10 exterior paint. (TR. 2824:17-23 [Lamb].) Further, the product’s label truthfully and accurately 11 disclosed its ingredients, by percentage, and stated that it was for exterior use. (TR. 2940:3- 12 2941:19, 2941:22-2942:23 [Bugos]; see also Ex. 1428.) There is no evidentiary basis to 13 14 support a conclusion DuPont had knowledge upon which to consider an exterior primer 15 containing a small percentage of white lead pigment to present a risk of hazardous lead 16 exposure in the 1960s, when the No. 39 House Primer was last manufactured. To the contrary, 17 the People’s historian, Dr. Markowitz, testified that DuPont had no special knowledge 18 concerning potential risks presented by exterior lead paint. (TR. 1773:14-20.) 19

D. NL INDUSTRIES

20

NL’s position:

21

22 1. Knowledge

23 While adopting arguments by its co-defendants, NL presented a detailed defense that 24 asserts this is “litigation by hindsight.” Essentially, the argument is that since NL could not 25 have known more than then-existing medical knowledge offered, liability cannot attach. 26 The earliest reports of children poisoned from house paint came from Dr. Lockhart 27 Gibson in Queensland, Australia in the 1890s and early 1900s. Gibson described the total 28 disintegration of lead paint in the semi-tropical sun, heat, and moisture. As a result, children People v. Atlantic Richfield Company, et al. 62 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 acquired copious amounts of pure lead “dust” on their hands. (TR 2669 [English]) U.S. 2 medical writers such as Dr. David Edsall (1907) read of Gibson’s cases but took away no 3 lesson to change the use of lead paint in this country. (TR 1235-36 [Kosnett]) 4 Dr. Julian Chisolm wrote in 1989 that Gibson’s concerns went largely unheeded by the 5 medical profession in Australia. (Ex. 1057.02; TR 2669:26-2670:10 [English]) The first U.S. 6 cases of children exposed to lead from paint used on houses came in the 1910s. Dr. Kenneth 7 Blackfan at Baltimore’s Johns Hopkins Hospital reported two children lead-poisoned from 8 chewing on painted furniture. The children had eaten large quantities of paint over long 9 periods of time. (Ex. 22.05 [p. 885, top] Dr. Blackfan urged that “energetic prophylactic 10 measures be taken with children who habitually eat painted articles.” (Ex. 22.06 [p. 887]) 11 Blackfan cited Gibson’s Queensland cases but he did not suggest a limitation on the use of lead 12 paint. (TR 1253:6-14 [Kosnett]) 13 14 Dr. Harvey Wiley, a respected U.S. public health official, in his 1915 Good 15 Housekeeping article, reminded readers of the poisonous qualities of lead but reassured them 16 “there need be little fear of poisoning from . . . lead in the paint.” (Ex. 1000.02, col. 2; see TR 17 1250 [Kosnett]) In the 1920s, Dr. John Ruddock (1924) in Los Angeles and Dr. Charles 18 McKhann (1926) at Boston Children’s Hospital established the “pica” diagnosis for children 19 lead-poisoned by chewing extensive quantities of paint from cribs, furniture, and window sills. 20 (Ex. 1004; Ex. 1382) These physicians saw the problem as a behavioral abnormality which 21 could be solved by parental intervention with children who ate non-food substances. (TR 22 2675-77 [English]) Both Ruddock and McKhann mentioned Gibson’s Queensland cases. 23 However, knowing these cases as well as their own, neither Ruddock nor McKhann 24 recommended a limitation on the use of lead paint in homes. (Id.; TR 1253:10-1255:10 25 [Kosnett]) 26 NL appears to have gained some knowledge of the published cases involving children’s 27 toys, cribs, and furniture around this time. NL’s historian, Dr. Sicilia, testified by deposition 28 that the company followed medical literature focused upon industrial lead poisoning. Sicilia People v. Atlantic Richfield Company, et al. 63 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 believed NL probably learned of “children chewing on objects with which they had intimate 2 contact such as cribs, toys, and furniture” by the mid- to late 1920s. (Ex. 1420, Sicilia depo at 3 27-28; see id. at 12-15) There is no evidence NL knew more than this from the literature. (TR 4 1747:8-18 [Markowitz]) After the LIA was created in 1928, NL was present to hear 5 information that the LIA Secretary, Felix Wormser, provided at meetings. (Ex. 1420 at 27) 6 The People’s historian agreed there was no evidence NL possessed actualknowledge of lead 7 poisoning of children in the home environment before the LIA’s December 1930 meeting, 8 discussed infra.(TR 1743:26-1744:3 [Markowitz]) 9 In November 1930, the U.S. Public Health Service summarized the reports of childhood 10 lead-paint poisoning in a release to the government’s inter-agency newspaper, U.S. Daily. 11 Historical records show that the Public Health Service knew of the Gibson, Blackfan, 12 Ruddock, and McKhann cases. (TR 2674:27-2676:4 [English]) The Public Health Service and 13 14 Surgeon General became actively involved in the issue. (TR 2675-2681 [English]) The next 15 month, at a December 1930 meeting, the LIA’s Wormser informed members that the U.S. 16 Daily had reported cases of “babies and children allegedly being lead-poisoned by chewing 17 paint on cribs.” (Ex. 75.02) Wormser sometimes reported in later meetings about publicly 18 reported cases of lead poisoning in adults and children. The LIA minutes show that Wormser 19 provided little hard information to the members about childhood poisoning after his 1930 20 report on “cribs.” His comments largely were complaints about innacurate publicity and his 21 reassurances to members that the LIA was investigating cases through experts such as 22 Dr. Joseph Aub of the Harvard Medical School. (E.g., Ex. 77.04) Wormser assured members 23 that the LIA was not afraid of the truth and was learning from experts that much of the 24 publicity was mistaken. (E.g., Ex. 108.08-.09) 25 The People’s case rests on information known or available to Defendants concerning 26 the toxicity of lead in large accumulations, arriving by high exposure pathways such as 27 unventilated factories (in the 1900s-10s) or children’s prolonged chewing of lead-painted toys, 28 cribs, and furniture (in the 1920s-30s). However, the People’s case for a present-day “public People v. Atlantic Richfield Company, et al. 64 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 nuisance” rests on more recent scientific concerns about low-dose lead hazards having no toxic 2 threshold (seeCDC 2012, Ex. 20), reaching children by the route of house dust (seeCDC 3 1991, Ex. 7; Sayre 1974, Ex. 1050). 4 The People’s witnesses testified that there is no safe level of lead. (See,e.g., TR 5 358:24-359:5 [Lanphear]; TR 962:28-963:5 [Gottesfeld]; TR 2316:20-25 [Matyas]) Many of 6 them cited the CDC’s 2012 “reference level” of 5 µg/dL of blood lead to measure the number 7 of children affected by lead. Dr. Fenstersheib testified that 344 children in Santa Clara County 8 “were lead poisoned” at levels above 5 µg/dL in 2010. (TR 904:15-22) Mr. Walseth said there 9 were 959 children in San Francisco above 5 µg/dL. (TR 2054:5-8) Dr. Matyas cited “an 10 enormously large number” being lead-poisoned in the state at the new reference level of 5 11 µg/dL. (TR 2350:12-17) 12 The People linked the latest studies of low-threshold toxicity with the house-dust 13 14 pathway first identified by Dr. Sayre in 1974. According to the People’s abatement expert, 15 Dr. Jacobs, the “main pathway of [children’s] exposure” is “from lead paint to lead in house 16 dust, to hand-to-mouth contact.” (TR 1461:8-10) The house-dust pathway ran through his 17 testimony about, e.g., the HUD studies and the up/down movement of windows. (TR 1461:25- 18 28, 1513-14, 2194-95 [Jacobs]) In redirect examination, Jacobs used this metaphor: 19 Q. For example, imagine the amount of sugar in a one-gram packet. . . . This 20 amount of lead dust spread evenly over 100 rooms would contaminate 21 those rooms at twice the level recommended by the EPA; is that right? 22 A. Yes. . . . [T]he fact is it is very easy to create lead dust. (TR 2202:12- 2203:6, quoting Ex. 1078.01) 23 24 In contrast, the People’s witnesses mentioned just one case of a child being poisoned in 25 recent years at blood lead levels high enough to be considered toxic in the decades before 26 1970. Dr. Rangan discussed a child brought to the hospital with blood lead of 78 µg/dL whose 27 x-rays showed lead chips. (TR 1094) It is not clear that any other cases described by the 28 People’s witnesses reached such a level. (SeeTR 1091-92 [Rangan]; TR 1373-74 [Navarro]) People v. Atlantic Richfield Company, et al. 65 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 In fact, the CDC web page summarizing California blood leads reported two children in the 2 state above 70 µg/dL in 2009, zero in 2010, and zero in 2011, regardless of source. (Ex. 1402) 3 The People argue Defendants should not have promoted lead paint after 1900, perhaps 4 even 1884 (cf. TR 144:23-27 [Mushak]), and yet their own historian does not criticize 5 companies for selling lead paint before the mid-1920s, if then. Markowitz’ reason for 6 choosing that date is it coincides with the earliest U.S. reports by Ruddock (1924) and 7 McKhann (1926) of children poisoned from chewing house paint on sills. Markowitz’ position 8 is manufacturers should have abandoned their product at the first indication of a potential 9 hazard in the medical journals, even when the physicians did not recommend such a response. 10 NL admits it is possible to find a “thread” of opinion in U.S. medical literature 11 suggesting that the interior use of lead paint should be limited. At a 1933 medical conference, 12 Dr. Robert Kehoe commented from the audience that there should be “strenuous efforts” to 13 14 eliminate lead from the “environment” of children. Dr. Kosnett quoted Kehoe but omitted the 15 recommendation by the main speaker, Dr. McKhann, appearing one paragraph earlier on the 16 page. (TR 1201:7-11, 1254:2-25) McKhann urged that “dissemination to mothers of 17 information on the subject should result in prevention of the disease.” (Ex. 23.05 [p. 1135, col. 18 1, “Summary” ¶ 2] (emphasis added)) (Kosnett also cited a 1940 consumer article but did not 19 claim any Defendant ever saw it. (TR 1201:19-28)) 20 NL relies on what it terms the “mainstream of medical opinion.” Thus, in 1931, the 21 Surgeon General advised the public in Child Welfare magazine that lead paint had “wide fields 22 of usefulness,” but “the painting of babies’ toys and cribs is not one of them.” (Ex. 1010.02) 23 The U.S. Children’s Bureau issued similar advice to parents, urging caution not to repaint 24 babies’ toys, cribs, and furniture with lead paint. (Ex. 1013.02, col. 4; Ex. 1019.05 [p. 17]; 25 TR 2677:26-2681:25 [English]) 26 The Baltimore Health Department gave advice by radio and print similar to that of the 27 Surgeon General and Children’s Bureau, focusing on using non-lead paint for toys and cribs. 28 (Ex. 1015.04; TR 2681:27-2685:5 [English]) People v. Atlantic Richfield Company, et al. 66 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Dr. Kosnett omitted mainstream science for a second time when he argued that low- 2 level toxicity of lead was already known in the 1930s. Kosnett focused on the Myers (1935) 3 article for the author’s concern that 24 µg/dL might be harmful. (TR 1210:9-22 [Kosnett]; 4 Ex. 55) But in cross, Kosnett conceded that the Myers article was the “exception for his time” 5 as he was “the only one at that time saying a level below 25 [µg/dL] was harmful.” (TR 6 1262:18-1263:8 [Kosnett]) The scientific mainstream was represented by lead researchers 7 Harold Blumberg (1937) at Johns Hopkins and Emanuel Kaplan (1942) at the Baltimore Health 8 Department, whose blood lead studies placed the toxic threshold at 80 µg/dL and the onset of 9 true lead poisoning in the range 100-200 µg/dL. (Ex. 1377; Ex. 1026; TR 2686-88 [English]; 10 TR 1263-65 [Kosnett]) 11 Retrospective articles written by public health authorities like Dr. Julian Chisolm 12 (Johns Hopkins) and Dr. Jane Lin-Fu (HEW) have recognized that the concept of lead toxicity 13 14 changed radically after 1970. (SeeEx. 1047; Ex. 1056) Dr. Lin-Fu stated in 1985: 15

[I]t should be obvious that what constitutes the health effects of lead is an

16 evolving concept that has changed dramatically since lead toxicity was first recognized in ancient times. In the last 10-15 years [since 1970-1975], as 17 scientific advances and modern technologies have provided more sensitive 18 measures of biochemical, psychological and electrophysiological changes associated with relatively ‘low’ levels of lead exposure, the concept has 19 undergone further scrutiny and changes that were fraught with controversies. Such controversies perhaps stem from the fact that what should be accepted as 20 ‘normal’ lead exposures in today’s world is a heatedly debated question. 21 (Ex. 1056.17 [p. 58])

22 2. Decline of Lead Paint

23 The use of white lead declined after 1922. Factory-made paint with new pigments like 24 titanium dioxide permitted the elimination of lead from interior paint for most uses not 25 requiring high durability or water resistance, and they allowed a reduced amount of lead in 26 exterior paints while keeping some lead pigment for its superior performance against weather 27 and ultraviolet exposure. (TR 3081:10-3082:4 [Bierwagen]) 28 People v. Atlantic Richfield Company, et al. 67 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Small amounts of white lead may have been used for interior paint in the 1940s, and 2 some publications continued to advise that lead could be used on interiors. (TR 1650 3 [Markowitz]) But mainstream medicine began to turn against interior lead paint at that time. 4 In late 1943, Dr. Randolph Byers and Elizabeth Lord wrote in the American Journal of 5 Diseases of Children about long-term intellectual deficits in children previously having acute 6 lead poisoning, and in the middle of their article, the authors advised against lead paint for 7 interiors. (TR 1770 [Markowitz]) Unlike Dr. Kosnett, Dr. Markowitz recognized Byers and 8 Lord (1943) as the first recommendation from any U.S. doctor or public health authority to 9 restrict the use of lead paint on home surfaces for children’s safety. (TR 1770-71) 10 The “Baetjer and Watt” report of 1949 found that many of the cases were children in 11 poorly maintained inner-city housing who ate peeling paint. (Ex. 1033; TR 2700-01 [English]) 12 This was recognized as a new source for childhood lead poisoning not previously noted to any 13 14 large extent. (TR 2700-01 [English]) 15 The Baetjer and Watt report led directly to Baltimore’s first-in-the-nation city 16 ordinance against the use of lead paint for home interiors, issued in 1951 by Dr. Huntington 17 Williams, the Health Commissioner. (TR 2699-701 [English]) The LIA embraced Baltimore’s 18 approach and distributed the Baetjer and Watt report to other cities and public health officials. 19 The LIA then worked with the American Standards Association to develop a warning label for 20 paint containing more than 1% lead, saying it was not to be used for interiors. This ASA 21 labeling standard issued in 1955 was supported by major U.S. medical organizations, federal 22 agencies, city health departments, and manufacturers. (Ex. 1041; TR 2701-02 [English]) 23 The 1955 ASA labeling standard marked the formal end of interior lead paint in 24 America. In historical overview, prior to Baltimore in 1951, no U.S. public health authority had 25 ever made a recommendation that lead paint was inappropriate to use in the vicinity of 26 children. (SeeTR 1270 [Kosnett]; TR 2677-85 [English]) 27

28 3. State of Medical Knowledge

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 The medical idea of lead poisoning changed dramatically in the 1970s. Chisolm’s 1971 2 article in Scientific American described the disease of lead poisoning as it was previously 3 known – a disease of recognizable symptoms first occurring mildly at 60 µg/dL and acutely 4 above 80 µg/dL. (Ex. 1047.08 [p. 22, col. 2]; TR 2637 [English]) As late as 1972, U.S. health 5 experts incrementally reset the “safe” level of blood lead in children, the “permissible” daily 6 consumption of lead by children, and the allowable quantity of lead in house paint, so that even 7 the “pica” children who ate paint would not exceed a daily maximum of lead. (Ex. 1387; 8 Ex. 1048; Ex. 1049; TR 2639-47 [English]) 9 The concept of non-symptomatic lead poisoning at lower levels emerged only as the 10 1970s ended. (Ex. 48.01; TR 379 [Lanphear]; TR 2655-57 [English]) Computer-based studies 11 of children’s IQ found differences that were correlated with lead, and continuing research 12 pushed down the level of concern through the 1980s and 1990s. (Ex. 1427; Ex. 1058; TR 13 14 2655-61 [English]) Dr. John Sayre’s 1974 article based on his Rochester studies launched 15 research in a new direction concerning the possibility of microscopic lead in ordinary house 16 dust as a pathway for children’s exposure. (Ex. 1050.04 [p. 269] (“The thought that dust may 17 be a source in childhood lead poisoning is not a new one,” citing, however, recent articles 18 dated 1970 and 1973.)) Sayre recognized that, while a large lead source like peeling paint was 19 needed for children to get blood lead above 60-80 µg/dL, house dust might provide enough 20 lead for children to reach lower but “undue” levels like 25-40 µg/dL. Researchers began 21 looking at dust as a pathway to the observed levels of blood lead in some older homes. 22 (TR 2652 [English]) 23 These new ideas of childhood lead poisoning coalesced in the CDC’s 1991 “Preventing 24 Lead Poisoning in Young Children.” (Ex. 1058) There the CDC reduced its “intervention 25 level” to 10 µg/dL because of new science suggesting adverse effects in children “at blood lead 26 levels previously believed to be safe.” (Id.at .08 [p. 1, ¶ 1]) It observed that no threshold was 27 being identified for the harmful effects of lead. (Id. at .09 [p. 2, ¶ 2]) And it added “lead- 28 contaminated dusts and soils” to its list of the primary pathways for children’s lead exposure People v. Atlantic Richfield Company, et al. 69 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 along with lead paint. (Id.at .11 [p. 4, ¶ 1]) This recognition and acceptance of house dust as 2 a pathway came 40 years after the use of lead paint in interiors had ended. 3

4 4. Promotion

5 The Court of Appeal framed the case as one alleging “intentional promotion of the use 6 of lead paint on the interiors of buildings with knowledge of the public health hazard that this 7 use would create.” Appeals Decision at 310. 8

(a) The Campaigns

9 The People’s evidence showed no misrepresentation in Defendants’ ads or in the LIA’s 10 11 promotional campaigns. Indeed, much of the evidence from Drs. Markowitz and Rosner 12 showed nothing except that Defendants or their local retailers listed the paint for sale. 13

(b) Government standards

14 The federal agencies said almost exactly what NL and the LIA said about white lead. 15 The Forest Products Laboratory of the U.S. Department of Agriculture tested paint for decades 16 and published its recommendations to the public. In 1939, Chief Chemist F.L. Browne gave 17 advice to homeowners for exterior and interior painting, and he strongly praised the 18 19 performance qualities of both pure white lead-in-oil and the mixed paints with lead pigment. 20 (Ex. 1020; TR 2692-95 [English]) Dr. Browne wrote to the LIA the same year urging more 21 white lead so as to maintain the quality of house paints. (Ex. 118.26; TR 749-54 [Rosner]) In 22 1953, the Forest Products Laboratory continued to endorse white lead paint for exterior use 23 because of its superior performance under adverse conditions. (Ex. 1037; TR 2697-98 24 [English]) 25 Chemists at the National Bureau of Standards, U.S. Department of Commerce, endorsed 26 white lead in a 1924 government manual. (Ex. 1005; TR 2688-90) In the late 1930s, they 27 advised the Minneapolis and New York City school boards to use more white lead in schools, 28 including their interior painting. (Exs. 1007, 1008, 1009; TR 2690-92 [English]) The Bureau People v. Atlantic Richfield Company, et al. 70 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 of Standards specified lead paint for government buildings, inside and out, in the 1950s and 2 1960s. (TR 2689-90 [English]) A group exhibit contains many other federal and state 3 recommendations and specifications for lead paint over many years. (Exs. 1643, 1645, 1646) 4 NL’s last promotional statement for interior use of lead paint was in a manual dated 5 1950 (Ex. 140), and its ads for exterior use ended by 1972. (SeeEx. 233). The People 6 presented no evidence that Defendants knew more than the federal agencies about health risks 7 to children from lead-painted homes. To the contrary, in 1930 the U.S. Public Health Service 8 publicized the reports of childhood lead poisoning in U.S. Daily, which was a publication 9 specifically written for other agencies of the government. Thereafter, representatives of federal 10 agencies often attended the meetings of the LIA along with members. (See, e.g., Ex. 85.03; 11 Ex. 114.03; Ex. 112.03) 12

13 (c) Lobbying

14 The People allege that “Defendants tried to stop the government from regulating lead 15 and to prevent the government from requiring warnings about lead’s hazards.” Appeals 16 Decision at 300. Dr. Markowitz identified two efforts by the LIA to influence laws that may 17 have regulated the use of lead paint: Massachusetts in 1933 and Maryland in 1949. (TR 1748- 18 49, 1777-79) However, Markowitz did not know what restrictions were proposed in 19 Massachusetts or what change occurred in its discussions with the LIA. (TR 1748-49) As for 20 Maryland, he noted the LIA’s involvement with state officials, but he admitted that the 1949 21 22 Toxic Finishes Act, which did not concern house paint, was repealed when public health 23 officials like Huntington Williams deemed it unworkable. (TR 1779-80) As for labeling laws, 24 the NPVLA contributed its views to California’s occupational health regulators in 1947 for 25 writing a painters’ safety warning. The NPVLA was one of many commentators, and 26 Markowitz speculates that the final regulation might have been delayed by a few months to 27 consider the NPVLA’s input. (TR 1781-82) 28 People v. Atlantic Richfield Company, et al. 71 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 The preference of most public health authorities was for the ASA’s approach in the 2 1955 labeling standard, telling people where not to use lead paint. (Ex. 1039) The LIA 3 opposed some other proposals because it wanted to avoid a balkanized system of different 4 labeling standards, and it opposed labels calling lead paint “Poison.” (See,e.g., Exs. 112.11, 5 114.12, 85.06, 86.23) The objection to “Poison” labels was not the secrecy of lead toxicity, 6 which was no secret, but the proper categorization of consumer chemicals by the acuteness of 7 the danger from physical contact. Prominent public health authorities of the time such as 8 Dr. Robert Mellins of the U.S. Public Health Service (also working with the Chicago 9 Department of Health) agreed with LIA that there was more appropriate labeling for lead paint 10 than “Poison.” (Ex. 1039.02; see TR 1783 [Markowitz]) 11

12 E. SHERWIN-WILLIAMS

13

SW’s position:

14

15 1. Knowledge

16 17 public. 18 SW’s position is it cannot be liable when its knowledge was no greater than that of the Drs. Kosnett and Markowitz had no evidence that SW knew of the medical literature

19 discussed by Dr. Kosnett. TR. 1168:14-1170:23 [Kosnett]; TR. 1944:5-12 [Markowitz]; TR. 20 1944:5-12 [Markowitz] (testifying that he had not seen “a single document that informed SW 21 that a child had been poisoned from exposure to one of SW’s paints or pigments”); see also 22 TR. 1744:28-1745:12 [Markowitz] (no evidence that the U.S. Daily was distributed to LIA 23 members or SW specifically). Drs. Markowitz and Dunlavy agreed that the first SW document 24 mentioning a risk to children from ingesting flaked-off lead paint was written in 1937 and 25 limited to interior paint. TR. 1950:17-1952:15 [Markowitz]; TR. 3026:12-3027:13 [Dunlavy]. 26 At that time, SW’s interior ready-mixed paints did not contain white lead carbonate (“WLC”). 27 Stip. 48; TR. 3007:11-3008:8 [Dunlavy]. That SW was aware of occupational risks to factory 28 workers or painters as early as 1900 does not establish that SW knew that WLC used in paints People v. Atlantic Richfield Company, et al. 72 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

4 2. Promotion

5 The parties stipulated that SW made WLC pigment from 1910 to 1947 at a plant in 6 Chicago, that SW did not make white lead sulfate, and that SW’s WLC was used primarily in 7 its own products. SW Stipulation Re. Admissibility of Certain Docs., Facts, July 1, 2013, ECF 8 No. 3240 (“Stip[s].”) 10-15. 9 In contrast to lead production and use, SW emphasized the use of lithopone and other 10 zinc pigments as opposed to white lead in oil. TR. 2998:20-2999:6, 2999:10-19 [Dunlavy]. Its 11 business plan was to oppose white lead in oil and to promote its ready-mixed paints, pitting 12 itself against the master painters and at times the LIA. TR. 2998:3-8 [Dunlavy]; TR. 3149:12- 13 3150:9 [Teece]. SW did not financially support the LIA’s White Lead Promotion Campaign. 14 Stips. 213-14. Plaintiffs conceded that SW did not attempt to prevent government regulation of 15 white lead pigment or lead-based paint. TR. 861:12-862:23 [Rosner]; TR. 1940:7-10 16 [Markowitz]. 17 Plaintiffs identified a single ad for Old Dutch Process (“ODP”) in 1919 in the Los 18 Angeles Times. Stip. 144. That ad, however, was run not by SW, but by an independent 19 dealer. Id. SW’s ad campaigns promoted against the use of white lead in oil. See, e.g., Ex. 20 1706.14; Ex. 1706.16. Plaintiffs have produced no evidence showing the amounts of ODP sold 21 22 in California, where or how it was used, or its presence today. Dr. Rosner conceded that SW’s 23 ads were “generic” ads for its brand and prepared paints, not for white lead. TR. 859:22-860:4; 24 see also TR. 837:20-838:2. 25 Dr. Rosner testified about the “Save the Surface” and “Clean Up Paint Up” campaigns 26 of NPVLA of which SW was a member. TR. 553:11-22; 557:10-559:27. First, those 27 campaigns encouraged the public to paint. TR. 801:10-13, 836:6-11 [Rosner]. They were not 28 People v. Atlantic Richfield Company, et al. 73 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 promotions of white lead. Second, trade association actions cannot be imputed to any single 2 member, and the associations were not SW’s agents. 3 SW’s advertisements for interior residential paints did not promote WLC, in part 4 because its interior paints, including enamels for woodwork, never contained WLC, except for 5 trivial exceptions. Stip. 28-29, 48, 53-54, 57-58, 72-73, 84-85; TR. 3007:11-3008:8, 3009:19- 6 3011:27 [Dunlavy]; TR. 1951:4-8 [Markowitz]; see also Ex. 1889. 7 Dr. Markowitz could not name another American paint manufacturer that had done 8 more to develop and market non-lead pigments and paints for residential use than SW. TR. 9 1958:16-1959:6. Dr. Teece concluded the federal government could not have banned the 10 residential use of lead paint in 1978 were it not for SW’s technological innovation. TR. 11 3153:6-15, 3162:6-15. 12 In addition to admitting that SW’s ads were generic and not for white lead, Plaintiffs 13 14 offered no evidence that SW’s ads were false or misleading. They did not prove their 15 allegations of deceit and misinformation. Corporations have a constitutional right to 16 truthfully advertise legal products, even products, such as alcohol and tobacco, that may harm 17 public health. U.S. Const. amend. 1; Cal. Const., art. I, § 2, subd. (a); Lorillard Tobacco Co. v. 18 Reilly, 533 U.S. 525, 553-54, 571 (2001); 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 19 (1996) Similar to the advertisements in Lorillard and 44 Liquormart, SW’s advertisements 20 contain only prices or descriptions for its products and do not encourage an illegal use or 21 hazardous misuse (unlike instructions to dump solvents into sewers in violation of the Polanco 22 Act, as in City of Modesto Redevelopment Agency v. Superior Court, 119 Cal. App. 4th 28 23 (2004)). 24

25 3. Causation

26 Plaintiffs have no evidence that SW’s WLC is actually present in their jurisdictions, let 27 alone where it is, how much, and in what condition. Dr. Markowitz had no evidence of sales 28 of SW’s lead-based paint with WLC, volume or dates of those sales, whether those sales were People v. Atlantic Richfield Company, et al. 74 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 caused by SW’s alleged wrongful promotions, and whether any SW’s WLC products remain 2 today in the Plaintiff jurisdictions. See, e.g., TR. 1937:16-26, 1938:27-1939:2. 3 Dr. Rosner conceded that “we can’t really tell” whether SW had any effect on the 4 presence of white lead in California. See TR. 832:10-17; see alsoTR. 831:19-832:17 (“Q.You 5 tried to — during the course of your work in this case — assess how big a player SW was in the 6 white lead carbonate pigment market . . . . [and, to that end, testified in your deposition that, 7 s]ince we have no numbers for California, we can’t really tell. … A.Right; for exact numbers 8 we could not tell.”). Plaintiffs have no evidence showing any increase in the sale of SW’s 9 white lead for residential use because of any promotion. TR. 745:3-12 [Rosner] (whether 10 promotional campaigns “caused increase or decrease or whether it changed trajectory 11 minimally, [Rosner] can’t tell. Quantitative data is not there to say that.”). 12 No data attribute a specific share of environmental lead to white lead, and of that 13 14 unknown white lead share, SW’s contribution is virtually nonexistent. Ex. 1883. Dr. Van 15 Liere estimated that SW’s white lead for all uses in California contributed a mere 0.1% of the 16 total lead consumed in the state from 1894 to 2009. TR. 2877:11-20. That low number cannot 17 support a finding that SW’s WLC, if present, is a substantial factor in causing a community- 18 wide public nuisance. 19

4. Other sources

20 Although some of Plaintiffs’ witnesses declared that paint is the major source of lead in 21 22 soil, they did not test the sources of lead in soil and dust. Dr. Courtney actually did a “Source 23 Analysis” in California and concluded that gasoline is the most “dominant” source. TR. 24 1357:14-18. The State has found that six times more lead was put into California’s 25 environment via lead from gasoline than by paint and coatings. See Equilon, 189 Cal. App. 4th 26 at 870; Charlton Dep. 40:13-25. Evidence shows that lead in dust and soil comes from a mix 27 of sources, with gasoline as the major contributor. Moreover, Plaintiffs’ evidence does not 28 People v. Atlantic Richfield Company, et al. 75 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 allow the Court to decide how much of the alleged lead hazard to children comes from exterior 2 paint exposures as compared to interior paint or myriad other sources. 3

14 6. Not significant problem

15 In Monterey County, 98-99% of all lead cases “deal with children who have been 16 exposed to a lead source outside of the United States, usually Mexico,” including traditional 17 food preparations and folk medicines. Ex. 1829.69. According to Monterey Childhood Lead 18 Poisoning Prevention Program (“CLPPP”) officials, lead cases due to exposure to lead-based 19 paint (not specified to be white lead) are “very rare.” Goldstein Dep. Ex. 8. So rare, in fact, 20 that Monterey admitted in its progress report that “[w]e finally had one housing-related case in 21 Jan. This is the first in several years, and was not in our usual case group.” Ex. 1135.66. For 22 San Diego, the largest source of children’s elevated BLLs is Mexican candy. Hicks Dep. 23 135:2-6. In San Mateo County, the “key” source of elevated BLLs in children—constituting 24 75% of cases—is exposure to “foreign products like ceramics or food or having taken home 25 remedies while in Mexico.” Goldstein Dep. Ex. 7. Santa Clara’s “premise is that our cases do 26 not generally stem from a child’s exposure to leaded paint or soil, (with a few exceptions) but 27 more from their cultural and daily living practices.” Ex. 1184; see also Exs. 1180.2, 1215.408, 28 1215.378. Likewise, in Solano County, cultural practices serve as the source of lead exposure People v. Atlantic Richfield Company, et al. 76 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 for most children. Ex. 1238; see also TR. 2371:23-28 [Matyas]. In Ventura County, one of 2 “the most common causes of lead poisoning in children is candy.” Chan Dep. Ex. 15 (Offer of 3 Proof). So, too, in Alameda County, Los Angeles County, and San Francisco, non-paint 4 sources are major contributors to elevated BLLs. See, e.g., Goldstein Dep. Ex. 34; TR. 5 1104:13-25 [Rangan]; TR. 2069:3-24 [Walseth]. Notably, members of the Get the Lead Out 6 Coalition, a coalition of the Bay Area CLPPP program officials concluded: “The [State] 7 Branch focuses on paint sources, as often do the Counties, because it justifies the funding, 8 however the coalition can address issues re: toys, ceramics, candies, cosmetics, sources that 9 may be considered secondary. In reality in many communities these are the main culprits.” 10 Goldstein Dep. 237:16-24, 238:9-14, 239:5-240:12, 241:5-12 & Ex. 33. 11 Plaintiffs’ case hinges on alleged asymptomatic cognitive harms in children arising 12 from very low BLLs. TR. 357:10-11 [Lanphear] (“[W]e focused on blood lead levels under 10 13 14 because that’s where the vast majority of children fell”). According to Dr. Valerie Charlton, 15 Director of the State’s CLPPB, there was no suggestion before 2003 of any potential harm to 16 children from those very low BLLs. Charlton Dep. 374:20-376:1. The question was unsettled 17 then and still is. TR. 2740:26-2741:8, 2763:28-2764:12 [Garabrant]; see also TR. 468:5-22 18 [Lanphear]; Ex. 38. As Plaintiffs’ expert Mr. Gottesfeld agreed, “the science has shifted” over 19 the last few years. TR. 1051:14-16; see also TR. 1110:21 [Rangan] (“Times have changed.”). 20 In setting a new reference BLL of 5 µg/dL for children just last year, Mr. Gottesfeld explained, 21 the CDC “move[d] the goalposts.” TR. 1039:15-1040:4. 22

7. The “safe” level has changed

23 24 Over the years, various public health agencies and the medical community, including 25 the CDC, established what they believed to be “safe” levels of lead for children. As medical 26 knowledge evolved, the “safe” level was reduced starting in the 1970s from 60 µg/dL to 40 27 µg/dL to 25 µg/dL. Ex. 1058.14-15. In 1991, the CDC said that 10 µg/dL was a “level[] of 28 concern,” but not lead poisoning. Ex. 1058.8, .14; TR. 2659:24-2660:7 [English]. In 2012, People v. Atlantic Richfield Company, et al. 77 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 CDC set 5 µg/dL as a “reference value,” which it defined as the BLL of the highest 2.5% of 2 children. Ex. 20.6. However, the new reference level is not health-based and will change over 3 time to identify those children with unusual exposure. TR. 1010:5-15, 1011:8-22 [Gottesfeld]. 4

5 VIII. SHERWIN-WILLIAMS’ CROSS-CLAIM

6 SW asserts that under California law intact lead-containing paint is not a “lead hazard,” 7 and California property owners who have failed to maintain their properties to prevent a lead 8 hazard are solely responsible for abatement. 9 If the Court were to declare the presence of intact lead paint to be a public nuisance, 10 SW argues it would in essence adopt a position rejected by the Legislature and also trigger § 11 17920.3, contrary to legislative intent. Further, Civil Code § 1941.1 renders “untenantable” any 12 building that contains eithera “lead hazard,” under Health & Safety Code § 17920.10 or any 13 “nuisance” under § 17920.3. Designation as an “untenantable” building has adverse 14 consequences for the owner. See Civ. Code §§ 1942(a) (permitting a tenant to repair and 15 deduct the cost from rent or vacate the premises), 1942.3 (shifting burden to the landlord in an 16 unlawful detainer action to prove habitability), 1942.4(a) (establishing liability for owner that 17 fails to address a violation of Health & Safety Code § 17920.10 within 35 days of notification), 18 1942.5 (imposing penalties for retaliation against a tenant reporting an untenantable condition). 19 If the Court were to find a nuisance here, SW argues, it would likely trigger consequences that 20 the Legislature sought to avoid. 21 22 The Housing division of the Health & Safety Code creates provisions authorizing 23 enforcement to correct violations and abate hazards: 24

IX. THE PEOPLE’S RESPONSE TO SW’S CROSS-COMPLAINT

16 Lead on homes is a public nuisance regardless of whether intact lead paint is a “lead 17 hazard” within the meaning of Health & Safety Code §§ 17920.10 and 105251 or a valid 18 existing ordinance. A condition need not be unlawful to constitute a public nuisance. Appeals 19 Decision at 310. Civil Code § 3483 does not make property owners who have created or 20 maintained a “lead hazard” within the meaning of Health & Safety Code §§ 17920.10 and 21 22 105251 and their predecessors solely responsible for the creation or maintenance or any 23 nuisance or public nuisance resulting from the “lead hazard” or for abatement of the “lead 24 hazard.” Defendants are liable for creating or assisting in the creation of the public nuisance 25 caused by the presence of lead paint in homes, regardless of whether the paint constitutes a 26 “lead hazard” as defined by statute. SW’s claims for declaratory relief therefore fail on the 27 merits. 28 People v. Atlantic Richfield Company, et al. 79 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Further, there is no need for the Court to address the issues raised by SW through 2 declaratory relief, as they are subsumed in the Court’s ruling in the main action. (California 3 Ins. Guar. Assn. v. Sup. Ct. (Jakes) (1991) 231 Cal.App.3d 1617, 1623.) This case therefore 4 does not present circumstances where it is “necessary or proper at the time under all the 5 circumstances” to grant declaratory relief. (Code Civ. Proc., § 1061.) 6 There is no “actual, present controversy over a proper subject” for declaratory relief 7 between SW and the Cross-Defendant Counties and Cities. (City of Cotati v. Cashman (2002) 8 29 Cal.4th 69, 79.) This is especially true where, as here, the parties to the main action (the 9 People and Defendants) have stipulated that no relief is being sought for any public building. 10 (Ex. P15; Ex. P13.) Thus, SW seeks a declaration concerning a purely academic point of law 11 related to the possible future application of California statutes to non-parties (that is, private 12 homeowners). “Courts do not decide abstract questions of law.” (Connerly v. Schwarzenegger 13 14 (2007) 146 Cal.App.4th 739, 746.)

15 For each of these reasons, which are in addition to and independent of this Court’s

16 ruling on the merits in the main action, this Court DENIES SW’s claims for declaratory 17 relief. 18

X. DEFENDANTS’ AFFIRMATIVE DEFENSES

19 Defendants have asserted multiple affirmative defenses for which they bear the burden 20 of proof. (Evid. Code § 500.) Defendants have abandoned all affirmative defenses that were 21 22 raised in their answer but not identified in the Joint Statement of Controverted Facts. Further, 23 they forfeited all affirmative defenses not pled in their answer. (California Acad. of Sciences v. 24 County of Fresno (1987) 192 Cal.App.3d 1436, 1442.) For the reasons set forth below, the 25 Court finds that Defendants have failed to prove their affirmative defenses they did not 26 abandon or forfeit by a preponderance of the evidence. 27

1. Civil Code section 3482 does not bar this action

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 “[S]tatutes like California Health & Safety Code section 17920.10 that merely define 2 lead hazards cannot be read so broadly as to immunize the conduct at issue in this lawsuit, 3 particularly the promotion of lead paint with knowledge of its hazards (which the Court of 4 Appeal has already found to state a sufficient claim for public nuisance).” (Dkt No. 3191 5 [Order Denying Defendants’ SW and NL Industries’ Motions for Summary Judgment filed 6 June 12, 2013 at 10:19-22].) 7

8 2. The People do not have to identify the specific location of a nuisanceor a specific product sold by Defendants

9 Under Gallo, supra, 14 Cal.4th at 1118 and In re Firearms Cases (2005) 126 10 11 Cal.App.4th 959, 987, fn. 21, the People – who have proven that the liable Defendants’ 12 promotion of lead paint resulted in harm to the community at large – need not identify the 13 specific location of the nuisance or a specific product sold by each such Defendant. (Dkt No. 14 3191 at 6:7-11:2].) The People have demonstrated that lead paint exists in homes in the 15 Jurisdictions. (¶¶ 62-72.) 16

3. The People do not need to prove reliance

17 Reliance is not an element of a public nuisance cause of action. (Dkt. No. 1037 [Order 18 19 after Hearing of February 3, 2012 filed February 6, 2012 at 3-9]; see also Firearm Cases, 20 supra, 126 Cal.App.4th at 988-89 [holding that plaintiff need only show that “a defendant’s 21 acts are likely to cause a significant invasion of a public right”]; City of Modesto v. Superior 22 Court (2004) 119 Cal.App.4th 28, 40-41 [failing to require actual reliance to establish public 23 nuisance claim].) 24

4 5. The People have not failed to join indispensable parties or misjoinedparties

5 As held by this Court, owners of buildings allegedly containing lead paint are not 6 indispensable parties. (Dkt. No. 211 [Order after Hearing filed June 14, 2011 Ex. A at 2-5].) 7 Defendants failed to provide evidence demonstrating that the People failed to join any other 8 indispensable parties. There also has been no evidence that the People misjoined parties. As 9 previously held by the Court on several occasions, the doctrines of primary jurisdiction and 10 11 equitable abstention do not bar this public nuisance action on behalf of the People. (Dkt. No. 12 1037 [Order after Hearing of Feb. 3, 2012 filed Feb. 6, 2012 at 16-20].) 13

6. The distinction between lead pigment and paint is immaterial

14 While certain Defendants have distinguished between paint containing lead pigments 15 and the lead pigments themselves (notably SW), this distinction is not material. Lead pigments 16 were applied to homes when: (1) mixed on site by master painters or other tradesmen; (2) 17 mixed into lead-in-oil sold to consumers and/or tradesmen; or (3) mixed into ready-made 18 19 paints sold to consumers. The end result was the same: application of lead pigments on homes 20 in the Jurisdictions. It is the liable Defendants’ knowing promotion and sale of lead pigments – 21 in whatever form – for home use that renders them liable. 22

7. The Noerr Pennington doctrine does not apply

23 The Noerr-Pennington doctrine “shields defendants from liability for their actions in 24 petitioning government officials[; i]t does not provide a basis for exclusion of evidence of 25 lobbying activities that might be relevant to show a defendant’s knowledge of the dangerous 26 27 nature of its product. . . .” (Hernandez v. Amcord, Inc. (2013) 215 Cal.App.4th 659, 680,see 28 also In re Brand Name Prescription Drugs Antitrust Litigation (7th Cir. 1999) 186 F.3d 781, 789.) The People have not sued Defendants for their lobbying activities; they have introduced People v. Atlantic Richfield Company, et al. 82 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 evidence ofDefendants’ lobbying activities (e.g., through the LIA) to show Defendants’ 2 knowledge of the hazards of lead in paint at the time of their lobbying activities. Hence, the 3 Noerr-Pennington doctrine does not apply. 4

5 8. The doctrine of laches does not act as a bar

6 “No lapse of time can legalize a public nuisance, amounting to an actual obstruction of 7 public right.” (Civ. Code, § 3490.) Thus, California courts have consistently held that laches is 8 not a defense to a public nuisance claim seeking abatement. (Strong v. Sullivan (1919) 180 Cal. 9 331, 334; see also Wade, supra, 200 Cal.App.2d at 61; City of Turlock v. Bristow (1930) 103 10 Cal.App. 750, 756; Williams v. Blue Bird Laundry Co. (1927) 85 Cal.App. 388, 395.) 11 Even if laches may be applied, it is “not available as a defense” in this case because the 12 People’s claim concerns “a public policy” – the health and safety of young children. (See City 13 and County of San Francisco v. Ballard (2006) 136 Cal.App.4th 381, 395.) 14 Because the nuisance is ongoing, the People did not unreasonably delay in bringing this 15 action. Defendants have also shown no prejudice. Any loss of evidence due to the passage of 16 time has resulted in greater prejudice to the People than Defendants. 17

18 9. Liability for the public nuisance does not infringe upon Defendants’freedom of speech, freedom of association or freedom to petition the

19 government 20 Defendants contend the case “impermissibly premises liability” on the exercise of the 21 “rights to freedom of speech, freedom of association, and freedom to petition the government.” 22 [Joint Statement of Controverted Issues at ¶ 11]. But the People may use speech as evidence. 23 Defendants contend the speech due constitutional protection is their advertising. (Tr. 99:20- 24 100:14.) Their advertisements are evidence that Defendants were promoting their products in 25 the Jurisdictions. Section V.N. above. Such evidence was expressly contemplated by the 26 27 Appeals Decision, supra, at 310. Further, advertisements may themselves constitute a basis for 28 liability. (See, e.g., Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 328.) People v. Atlantic Richfield Company, et al. 83 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Nor are Defendants’ rights to freedom of association impermissibly curtailed by the 2 imposition of public nuisance liability. The First Amendment protects associations “for the 3 purpose of engaging in those activities protected by the First Amendment—speech, assembly, 4 petition for the redress of grievances, and the exercise of religion.” (City of Dallas v. Stanglin 5 (1989) 490 U.S. 19, 24.) However, an “[a]ssociation that is merely commercial does not 6 implicate any fundamental right.” (American Acad. of Pain Management v. Joseph (9th Cir. 7 2004) 353 F.3d 1099, 1112.) Liability in this case is not premised on any Defendant’s 8 membership in the LIA; the trial testimony related to the LIA is merely evidence of 9 promotional activity and each Defendants’ knowledge of the hazards created by lead paint. (¶¶ 10 72-78, 96-104.) 11

The Court finds Defendants’ affirmative defenses do not preclude liability in this

12

case.

13

14 XI. JOINT AND SEVERAL LIABILITY

15 When multiple tortfeasors are each a substantial factor in creating a public nuisance, 16 they are jointly and severally liable for that nuisance. (See American Motorcycle Assn. v. 17 SuperiorCourt (1978) 20 Cal.3d 578, 586; Dauenhauer v. Sullivan (1963) 215 Cal.App.2d 18 231, 236.) 19 “[W]hen the damages cannot be apportioned between two tortfeasors or between 20 tortious and nontortious causes, a tortfeasor whose acts have been a substantial factor in 21 22 causing the damages is legally responsible for the whole.” (State v. Allstate Ins. Co. (2009) 45 23 Cal.4th 1008, 1036 (Allstate); see also In re Methyl Tertiary Butyl Ether MTBE Products 24 Liability Litigation (S.D.N.Y. 2011) 824 F.Supp.2d 524, 543.) This is true where multiple 25 sources of contamination result in a single nuisance. (Allstate, supra, 45 Cal.4th at 1032-33, 26 1036.) 27 Furthermore, where the damages and remedy are indivisible, each defendant is jointly 28 and severally liable. (Id. at 1036) The defendants have the burden of showing that it is possible People v. Atlantic Richfield Company, et al. 84 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 to apportion the damages. (Idat 1033-34.) To the extent each Defendant’s conduct was a 2 substantial factor in creating the public nuisance and because Defendants offered no evidence 3 that an abatement remedy can be apportioned, each Defendant is potentially jointly and 4 severally liable for the public nuisance. 5

7 A. Plaintiff’s Position: Removing Lead on Homes Built Before 1978 Is The Only Way To Ensure That Children Living In Those Homes Are Not 8 Poisoned By Lead. 9 The People contend: 10 “‘Abatement of a nuisance is accomplished by a court of equity by means of an 11 injunction proper and suitable to the facts of each case.’” Appeals Decision supra, at 310. 12 Injunctive relief generally requires a showing of substantial and irreparable injury. (47 13 Cal.Jur.3d Nuisances §§ 64-65; see also Thompson v. Kraft Cheese Co. of California (1930) 14 210 Cal. 171 [applying substantial and irreparable injury standard in nuisance case].) Lead 15 poisoning from lead paint causes substantial and irreparable harm in the Jurisdictions. (FAC 16 ¶¶ 31-72, 82-95, 100-103, 218-221, 228-231.) 17 18 A public nuisance under Civil Code sections 3479 and 3480, by definition, substantially 19 and unreasonably interferes with rights common to the public. And in every case where a 20 California court has found a public nuisance under those sections, the court has ordered some 21 form of abatement. (See, e.g., Apropertyna, supra, 14 Cal.4th at 1126; City of Claremont v. 22 Kruse (2009) 177 Cal.App.4th 1153, 1165; People v. Mason (1981) 124 Cal.App.3d 348, 353- 23 54.; People v. Oliver (1948) 86 Cal.App.2d 885, 886.) 24 The balancing of interests and conveniences in this case weigh in favor of abatement. 25 (See Hulbert v. California Portland Cement Co. (1911) 161 Cal. 239.) Lead paint causes 26 significant harm to children, families, and the community at large. And the removal of lead 27 28 17 See Court Order of November 4, 2013 pursuant to which further memoranda by all parties specifically pertaining to abatement were submitted. People v. Atlantic Richfield Company, et al. 85 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 paint in affected homes will significantly reduce the number of children poisoned by lead. 2 These benefits outweigh the costs of abatement. (¶¶ 31-72, 82-95, 100-103, 228-243.) 3 Whether a nuisance can be abated “at a reasonable cost by reasonable means” is 4 relevant only in private nuisance cases. Indeed, the answer to that question only determines 5 whether a private nuisance is permanent or continuing. (See Mangini v. Aerojet-General Corp. 6 (1996) 12 Cal.4th 1087, 1090.) The distinction between permanent and continuing private 7 nuisances affects the remedy and statute of limitations. (See Spaulding v. Cameron (1952) 38 8 Cal.2d 265, 267; Capogeannis v. Superior Court (1993) 12 Cal.App.4th 668, 677-79 9 [discussing continuing and permanent private nuisances].) Private nuisances that cannot be 10 abated at a reasonable cost and by reasonable means are deemed permanent and can only be 11 remedied by damages – and not injunctive relief – and are subject to a statute of limitations. 12 (Id. at 675-76.) 13 14 By contrast, the only remedy for a public nuisance claim on behalf of the People is 15 abatement – i.e., injunctive relief. (Appeals Decision at 310-11.) Civil Code section 3490 16 further provides that there is no statute of limitations for a public nuisance claim. (See also City 17 of Turlock v. Bristow (1930) 103 Cal. App.750, 756 [“Neither prescriptive right, laches, nor the 18 statute of limitations is a defense to an action to abate a public nuisance”].) Thus, a public 19 nuisance, unlike a permanent private nuisance, is, by definition, “abatable.” 20 The People’s abatement plan, it is argued, can abate the public nuisance in this case at a 21 reasonable cost and by reasonable means. As the California Supreme Court previously 22 recognized in the second appeal in this case: 23 Although the remedy for the successful prosecution of the present case is unclear, we can 24 confidently deduce what the remedy will not be. This case will not result in an injunction that prevents defendants from continuing their current business operations. The challenged conduct 25 (the production and distribution of lead paint) has been illegal since 1978. Accordingly, 26 whatever the outcome of the litigation, no ongoing business activity will be enjoined. Nor will the case prevent defendants from exercising any First Amendment right or any other liberty 27 interest. Although liability may be based in part on prior commercial speech, the remedy will 28 not involve enjoining current or future speech. Finally, because the challenged conduct has long since ceased, the statute of limitations on any criminal prosecution has run and there is neither a threat nor a possibility of criminal liability being imposed upon defendants. People v. Atlantic Richfield Company, et al. 86 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 The adjudication of this action will involve at least some balancing of interests, such as the social utility of defendants’ product against the harm it has caused, and may implicate the free- 2 speech rights exercised by defendants when they marketed their products and petitioned the 3 government to oppose regulations. Nevertheless, that balancing process and those constitutional rights involve only past acts–not ongoing marketing, petitioning, or 4 property/business interests. Instead, the trial court will be asked to determine whether defendants should be held liable for creating a nuisance and, if so, how the nuisance should be 5 abated. This case will result, at most, in defendants’ having to expend resources to abate the 6 lead-paint nuisance they allegedly created, either by paying into a fund dedicated to that abatement purpose or by undertaking the abatement themselves. The expenditure of resources 7 to abate a hazardous substance affecting the environment is the type of remedy one might find 8 in an ordinary civil case and does not threaten the continued operation of an existing business. 50 Cal. 4th at 54-56 9 10 Childhood Lead Poisoning Prevention Programs operated by the Public Entities have 11 largely reached their limits. The Public Entities lack the resources to remove lead paint from 12 homes in their jurisdictions. Thus, the number of lead poisoned children may not increase. But 13 that number is unlikely to decrease much more, if at all. (Tr. 179:28-190:4, 999:12-1000:23, 14 1385:27-1386:2, 1407:26-1408:3, 1440:11-1441:6, 1525:16-1526:6, 1525:16-1526:6, 2215:2- 15 9, 2236:1-4, 2569:24-2570:26, 2355:28-2356:17.) The Public Entities lack the resources to 16 force homeowners to remove all lead paint from homes in their jurisdictions. Moreover, 17 enforcement of lead paint abatement requirements against homeowners is often not feasible. 18 (Tr. 1376:3-16, 2382:19-25, 3263:9-3264:7; 3267:5-18; 3270:5-3271:20.) 19 As long as lead paint remains on homes in the Jurisdictions, children living in those 20 homes will be at significant risk of lead poisoning. (Tr. 248:22-249:20, 958:23-959:5, 1093:17- 21 23, 1094:1-1095:15, 1305:1-6, 1405:5-12, 1414:1-1415:22, 1417:7-27, 1438:19-1439:17, 22 2295:13-27.) Prevention of childhood lead poisoning due to lead paint requires, at minimum, 23 identification of lead paint on pre-1978 homes and removal of the most immediate lead paint 24 hazards in those homes. (Tr. 172:28-5, 179:4-15, 1467:24-1470:22, 1492:15-25, 1495:17- 25 1496:16; P45_10; P54.) Experts have demonstrated that abatement of lead paint substantially 26 27 reduces the likelihood that a child will be lead poisoned. (Tr. 411:21-414:3, 997:7-998:24, 28 1467:24-1470:22, 1522:7-14, 1550:20-27; P45_10, P54.) People v. Atlantic Richfield Company, et al. 87 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 Both the People’s and Defendants’ abatement experts agreed that abatement of lead 2 paint hazards in homes is necessary to protect the children living in those homes. (Tr. 1457:19- 3 1458:7; 3203:9-3204:27.) 4 The benefits of abating lead paint arguably exceed the costs of maintaining the status 5 quo. Medical treatment, special education costs, lost lifetime earnings, lost tax revenue, and 6 other costs associated with lead poisoning amount to hundreds of billions of dollars. (Tr. 7 1542:25-1543:27; 1544:12-13; Ex. P44.) Every dollar spent on reducing lead paint exposure 8 results in societal savings between $12 and $155. (Tr. 1542:25-1543:27, 1544:12-1545:13.) 9 “This cost-benefit ratio is even better than for vaccines, which have long been described as the 10 single most cost beneficial medical or public health intervention.” (Tr. 1545:27-1546:2.) 11 Defendants’ abatement expert acknowledged that lead paint hazards in homes should be 12 remediated despite the expense and time required. (Tr. 3202:20-3203:4.) 13 14 The People’s proposed abatement plan (Plan), as revised by the Court, is consistent 15 with the 2012 recommendations of the CDC’s Advisory Committee on Childhood Lead 16 Poisoning Prevention. (Tr. 1467:24-1470:22; Ex. P45_10; P54.) The Plan targets pre-1978 17 homes in the Jurisdictions that pose the greatest risk of lead poisoning to children, requires 18 outreach and education to homeowners, requires trained individuals to inspect homes for lead 19 paint, it utilizes abatement techniques that have been used for decades and have been proven to 20 be safe, and it takes appropriate measures to protect the safety of residents and community 21 members. The People contend an abatement plan containing these elements will effectively and 22 efficiently abate the nuisance. (Tr. 1472:12-1473:8; P262.) And Defendants’ abatement expert 23 agreed that lead paint inspections and prioritization of abatement based on those inspections, as 24 set forth in the Plan, are a sensible way to direct limited resources. (Tr. 3204:28-3209:4.) The 25 Plan can be implemented in a reasonable amount of time and at a reasonable cost. (Tr. 26 1547:25-1550:19, 2159:3-7.) 27 The total cost of the Plan as proposed at trial by the People’s abatement expert, Dr. 28 David Jacobs, is $1.618 billion if implemented by the Public Entities. (Tr. 1547-1550; P263.) People v. Atlantic Richfield Company, et al. 88 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 For the cost of inspection, Dr. Jacobs estimated $200 per unit if done by the Public Entities, or 2 $500 per unit if done by a private contractor. The number of pre-1978 homes within the 3 Jurisdictions needing inspection is approximately 3,555,000. Because not all units in multi- 4 family housing must be inspected in light of common painting history, he reduced the 5 3,555,000 number by 20%. Thus, pursuant to the Jacobs plan the total cost of inspections 6 would be $569 million if done by the Public Entities, or $1.42 billion if done by the Defendants 7 through private contractors. (Tr. 1547-1549.) Dr. Jacobs estimated the average cost of 8 abatement to be $2,007 per unit. He further estimated that approximately 498,000 units in the 9 Jurisdictions would require abatement. For education and outreach, Dr. Jacobs estimated the 10 total cost to be $50 million. (Tr. 1550.) When abatement is performed by trained and certified 11 individuals, it significantly reduces rather than increases the risk of harm from lead paint. (Tr. 12 1550:25-27176:28-179:3, 1472:12-28.) 13 14 By limiting the Plan to interior surfaces and conditions, the cost is reduced 15 substantially, as described below. 16

B. Defendants’ Response to the Proposed Plan

17 Dr. Jacobs’ method for lead paint remediation performs no better than so-called interim 18 controls focusing on repair and repainting. The Jacobs plan calls for universal inspection of 19 pre-1978 homes to hunt for lead paint in every room of every house. (TR 1463, 1492 [Jacobs]) 20 As Dr. Jacobs stated, “what we are doing is trying to find a dangerous needle in a haystack.” 21 22 (TR 1465:23-24) The authoritative HUD study undercuts Jacobs. The goal of HUD’s 2004 23 “fourteen city” study was to compare the effectiveness of different remediation methods upon 24 children’s blood lead and dust lead from actual experience. HUD wanted to learn whether any 25 one method was significantly superior to others to help the agency plan cost-effective work in 26 the future. The remediation methods being compared ranged from “cleaning and spot 27 repainting” (Strategy 02) or “paint stabilization” (Strategy 03) up to “window replacement” 28 (Strategy 05). (Ex. 70.13 [p. ES-3]) (The “full abatement” strategy (06) was used too rarely to People v. Atlantic Richfield Company, et al. 89 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 be analyzed. (TR 1575 -76 [Jacobs])) Jacobs’ plan for this case is essentially Strategy 05. 2 (TR 2095) 3 HUD’s first report two years after property remediation found no significant differences 4 among Strategies 02 through 05 in terms of children’s blood lead levels or floor dust lead. 5 (Ex. 70.18 [p. ES-8]) The researchers wrote that floor dust, not window dust, was the “primary 6 exposure” pathway into children’s blood lead, which could explain why lower window dust 7 lead in Strategy 05 did not yield lower blood leads. (Id.) The three-year follow-up reported by 8 Clark, et al. again found no significant differences among Strategies 02-05 in children’s blood 9 lead or floor dust lead. (Ex. 1071.09, col. 1, ¶ 6) Blood testing then stopped. The six-year 10 follow-up reported in Wilson, et al. still found no significant differences between remediation 11 strategies and floor dust lead. (Ex. 1064.11 [p. 247, col. 1, ¶ 2 & col. 2, ¶ 2]) The twelve-year 12 follow-up reported in Dixon, et al. found a steady downward decline in floor dust lead by all 13 14 remediation methods, but a slightly lower floor dust lead after window replacement. 15 (Ex. 1074.06, fig. 1) 16 Jacobs claimed to have found a gain from window replacement at twelve years (which 17 he later admitted was “not that big” (TR 2196:3-4)). But Jacobs described the twelve-year 18 results of Dixon, et al. very differently from the article. Jacobs claimed that floor dust lead 19 began to “creep up” after twelve years in homes with maintenance but not window 20 replacement. (TR 1514) This was a crucial point for him in order to show that measures short 21 of window replacement do not last, but it was a misstatement. In cross, Jacobs admitted there 22 was a continuing decline of dust lead that occurred with all methods. (TR 1590:26-1591:8) 23 On redirect examination, Jacobs gave a new explanation why window replacement was 24 better than maintenance, claiming that “we show [in Dixon, et al.] that if we didn’t replace the 25 windows, . . . 24 percent of the units actually failed clearance standards if the windows were 26 not replaced. So that’s what I was trying to get at”, but “[w]ith the window replacement, you 27 didn’t see that result.” (TR 2196:1-6, 13-15) However, the Dixon article contradicts Jacobs 28 again. The only mention of a 24% failure rate was for all units together with all methods of People v. Atlantic Richfield Company, et al. 90 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 remediation – window replacement as well as spot repainting – when tested at a 10 µg/ft2 2 standard for floors. (Ex. 1074.06, col. 2, ¶ 3) The clearance failure rates at the federal 3 standard (40 µg/ft2) were actually 8% for all units, 7% for non-window replacement units, 19% 4 for partial-window replacement units, and 5% for all-window replacement units. (Ex. 1074.04, 5 Table 1, 2nd line) 6 HUD accepted the study’s outcome in its 2013 Policy Guidance, not allowing funded 7 window replacement based on presence of lead paint without a demonstrated need. (TR 1571- 8 72 [Jacobs]) In contrast, Jacobs has never accepted HUD’s findings. Jacobs expected HUD’s 9 study to support his belief in the superiority of window replacement, and although it failed to 10 support him, he claims it supports him anyway. The People’s Abatement Plan (Ex. 262) was 11 prepared by Dr. Jacobs alone. (TR. 1569:23-24 [Jacobs].) It has not been peer reviewed or 12 reviewed by any scientific body, federal agency, or the California Childhood Lead Poisoning 13 14 Prevention Branch. 15 Since the defendants do not have the ability to remediate lead paint on private property, 16 the People rely on voluntary participation by property owners. (TR. 1487:8-13 [Jacobs].) 17 Although the People’s expert, Dr. Jacobs, has expressed his opinion that a significant number 18 of owners would volunteer and, further, that implementation of the Abatement Plan would 19 “significantly” reduce blood lead levels (TR. 1487:22-1488:9 [Jacobs]), he does not quantify 20 those conclusions nor does he provide a basis for those speculative opinions. 21 The People propose massive inspection and risk assessment for all residential units 22 built before 1980, which their expert estimates to be 3.5 million covered units, at a cost of $1.4 23 billion and roughly 15 million hours to complete. (TR. 1486:3-14; TR. 2136:22-24 [Jacobs]; 24 TR. 3219:5-18 [Heckman].) Such inspection is overbroad and unnecessary. Persons who 25 bought or rented pre-1978 houses since 1996 have received an EPA disclosure about lead paint 26 and the precautions that should be taken, so they should be aware of the possible presence of 27 lead paint. (TR. 3219:5-18 [Heckman].) Moreover, for homes built from 1940 to 2010, the 28 date of construction does not predict blood lead levels. And, for houses built before 1940, People v. Atlantic Richfield Company, et al. 91 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 there is only a .51 µg /dL differential between homes built before 1940 and 1978-89 using 2 NHANES data. (Ex. 3021.) There is no evidence whether paint was the source for that 3 difference or that .5 µg/dL matters for children’s health. Data from RASSCLE showed 4 essentially the same results. (Ex. 3025.) 5 Fewer than 5% of children living in pre-1940 homes have blood lead levels over the 6 “reference level” of 5 µg/dL recently set by CDC. Only 2% of children living in homes built 7 between 1940 and 1978 have blood lead levels over 5 µg/dL. (TR. 2518:12-2519:16 8 [Washburn]; Ex. 3023; Ex. 1404.) Thus, the houses where children with blood lead levels over 9 5 µg/dL reside comprise a very small percentage (2%-5%) of pre-1978 housing. There is no 10 evidence that the owners of those 2%-5% of the houses will voluntarily participate in the 11 inspection and assessment program. As Dr. Jacobs admitted, the People do not know how 12 many units have lead paint. (TR. 1486:3-10 [Jacobs].) It is overbroad and unnecessary to 13 14 inspect and assess 3.5 million homes when looking for the 2%-5% of houses that may 15 potentially pose a risk that a child may have a blood lead level over 5 µg/dL, particularly when 16 there is no evidence that the Abatement Plan will lower blood lead levels. 17 Additionally, it is argued it is unnecessary to inspect 3.5 million homes for the “needle 18 in the haystack” when the jurisdictions already have information to identify properties and 19 areas that may present a risk for elevated blood lead levels. The Abatement Plan designates as 20 Priority Group 1 houses and neighborhoods known to local authorities as having multiple 21 housing code violations and multiple reported elevated blood lead levels (Ex. 262.008). A 22 relatively small number of properties may account for large numbers of children with elevated 23 blood lead levels, and the addresses are often linked to repeated cases. (TR. 1024:8-15 24 [Gottesfeld].) 25 There is a significant risk that an invasive intervention plan requiring the removal and 26 replacement of building components can increase blood lead levels in children with already 27 low blood lead levels. (TR. 3200:2-3201:19 [Heckman]; Ex. 1436.) The HUD 3,000 Homes 28 Study found 9% of children living in abated properties had their blood lead levels increased by People v. Atlantic Richfield Company, et al. 92 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 more than 5 µg/dL after abatement, thus highlighting the dangers of disturbing lead paint even 2 under well-supervised projects. (Ex. 70.015.) 3 SW contends the People have not met their burden of proving that the cost of the 4 Abatement Plan or the time that it will take are reasonable. Dr. Jacobs estimated an average 5 cost of $2,007 per unit but that estimate was not peer reviewed or taken from any study of 6 comparable California data. A study conducted by Dr. Jacobs estimated the cost for window 7 replacement to be between $7,000 and $16,600 for units varying between 800 to 1,800 square 8 feet. (Ex. 72.019.) Mr. Heckman, who has participated in several hundred abatement projects, 9 has never been involved in an abatement project involving replacement of windows that cost 10 under $2,007 (TR. 3193:8-18; TR. 3193:26-3194:1 [Heckman].) Mr. Heckman has compiled 11 figures from various remediation programs showing a large range of cost depending upon the 12 scope of the work. (Ex. 1438.) SW submits the Court should not rely upon Dr. Jacobs. In 13 14 conclusion, SW argues that when the Court has “no idea how much [the remedy] would cost 15 but only knows that it would cost unascertainable millions of dollars, . . . there is not 16 substantial evidence that the nuisance is abatable.” Mangini, supra, 12 Cal. 4th at 1103. 17

XIII. FINDINGS OF FACT AND CONCLUSIONS OF LAW

18

A. Findings of Fact Summarized

19

The Court incorporates by reference and adopts as its Findings of Fact the evidence,

20

including tables and charts, set forth in detail in Sections V. B. through V. O above.

21 In summary the Court finds: 22 ? White lead carbonate and the paint in which it is a key ingredient are harmful particularly 23 to children 24 ? While the government standards concerning blood lead levels has changed over time, 25 there is no safe level of lead in blood 26 ? Lead paint causes significant physical harm to individuals which has lasting effects, 27 including diminished intellectual capacity of the afflicted 28 People v. Atlantic Richfield Company, et al. 93 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 ? There is a clear and present danger in the form of a public nuisance that needs to be 2 addressed 3 ? Defendants, to varying degrees, promoted and sold lead paint in the Jurisdictions for 4 years, and in some cases for decades 5 ? Defendants, to varying degrees, sold lead paint with actual and constructive knowledge 6 that it was harmful 7 ? Defendants, to varying degrees, promoted lead paint even when non-leaded paints were 8 available 9 ? Higher blood lead levels are also due to non-paint sources, such as deposits from 10 gasoline, candies, and water, but these other causes do not eclipse the more significant 11 harm caused by lead paint 12 ? Truly intact lead paint does not pose a hazard, but since all paint deteriorates over time 13 the hazard literally remains just below the surface 14 ? Lead paint remains the primary source of lead exposure for young children 15 ? Lead paint is prevalent in the jurisdictions and is of continuing adverse effect 16 ? While there have been significant reductions in tested blood lead levels over time, the 17 issues presented in this case are not resolved 18 ? Existing programs at all government levels lack the resources to effectively deal with the 19 problem 20

B. Conclusions of Law

21 22 The Court finds the evidence is overwhelming that lead ingested by anyone is 23 hazardous. In sufficient doses the ingestion of lead will almost certainly cause ailments ranging 24 from muscular and skeletal abnormalities to mental defects, all of which are irreversible. There 25 is compelling evidence that children who have ingested lead will likely suffer from diminished 26 intellectual capacity. In turn, these children may develop behavior problems including 27 antisocial behavior. Ultimately society will pay for these problems over time. 28 Various commissions have studied the issue for decades. The most recent official report in January 2012 was from the Advisory Committee on Childhood Lead Poisoning Prevention People v. Atlantic Richfield Company, et al. 94 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 of the Center for Disease Control (“CDC”). That Committee released a report recommending a 2 comprehensive overhaul in how the CDC treats blood lead levels (BLL) in children. Most 3 importantly, the report’s core scientific claim is that there is no safe level of exposure to lead 4 for children, since strong evidence shows that even BLL’s less than 10 micrograms may cause 5 irreversible developmental problems in children, including brain, lung, and heart damage. It 6 recommended that the CDC eliminate the 10 microgram “level of concern” standard altogether 7 and switch to a prevention-based approach. The goal of this approach is to pre-emptively avoid 8 lead exposure rather than handle cases of exposure exceeding a certain limit after they occur. 9 To implement this strategy, the CDC was asked to set a BLL reference value at the 10 97.5th percentile of BLL’s in children and use that value to identify regions and populations at 11 greatest risk for lead exposure. The CDC was advised to reduce those risks and update the 12 reference value every four years. In May 2012 the CDC adopted the Committee’s 13 recommendations and set the first reference value at 5 micrograms. In the words of Dr. Mary 14 Jean Brown, it is time to put to rest the “myth that the lead problem is solved.”18 15 Of course, by any measure, the remedy sought by the People is of substantial, even 16 massive proportions. Seeking the abatement of lead by inspections and rehabilitation of tens of 17 thousands of homes – at a minimum — is a daunting decision. But the Court is convinced that 18 although great strides in reducing lead exposure have been made, and the incidence of 19 exposure with correlative blood lead levels has declined to a low level, thousands of children in 20 the jurisdictions are still presently and potentially victimized by this chemical. 21 Should the defendants — or some of them — bear responsibility for the creation of this 22 nuisance? To answer that question the Court has to decide whether the standards for liability 23 proscribed by the Court of Appeal have been satisfied. Those standards are as follows: 24 Defendants’ knowledge: The Court is convinced that the knowledge need not be 25 actual, although proof of actual knowledge has been put in evidence, but that constructive 26 knowledge will suffice. See Section V.B above. The Defendants have described in great detail 27 28 18 During the trial Defendants made the cynical suggestion that this lower level was only set to allow the Committee to keep its funding; the Court finds this unsupported by the evidence and disregards the allegation. People v. Atlantic Richfield Company, et al. 95 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 the extent of medical and governmental knowledge over the course of decades. Their argument 2 is they cannot be held responsible for the lead issue because that is “liability by hindsight.” The 3 evidence is to the contrary. Before the turn of the 20th century lead was known to be toxic. Not 4 only were there reports of this from Australia, but in 1909 the California Supreme Court in 5 Pigeon detailed the reasons for holding ConAgra (Fuller) liable for the severe injuries suffered 6 by its workers in a lead manufacturing plant. There were discussions on the subject of lead- 7 related problems held by the trade association whose mission it was to promote this chemical at 8 least as early as 1900. SW’s own publication of Chameleon identified lead as a serious 9 problem. In 1918 DuPont made an issue in its advertisements that some of its products were 10 “lead-free.” It is not reasonable to believe these discussions were spontaneous; some persons in 11 the LIA or among the manufacturers — for whatever reason — thought it important enough to 12 raise the issue. It is telling that the head of the LIA was defensive enough about the situation to 13 state “the LIA was not afraid of the truth?” Why would he say this if there were not serious 14 concerns industry-wide about lead? In short, once constructive knowledge is accepted as the 15 standard there is ample authority to hold the Defendants liable. See Section V.L above.

16 “No proof of specific injury”

17 SW in particular has continued to reiterate there can be no liability without proof of 18 lead in specific properties. This position is not consistent with the Appeals Decision or 19 California law. See People ex. rel. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1118

20 “Hindsight”

21 The related issue is whether the Defendants can be held retroactively liable when the 22 state of knowledge was admittedly in its nascent stage. The Court takes judicial notice of the 23 fact that drugs, facilities, foods, and products of all kinds that were at one time viewed as 24 harmless are later shown to be anything but. Yes, the governmental agencies charged with 25 public safety may have been late to their conclusions that lead was poisonous. But that is not a 26 valid reason to turn a blind eye to the existing problem. All this says is medicine has advanced; 27 shouldn’t we take advantage of this more contemporary knowledge to protect thousands of 28 lives? People v. Atlantic Richfield Company, et al. 96 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

1 “Other causes and problem solved”

2 The Court is not persuaded that since the various lead control programs have been 3 successes no further efforts are appropriate. NL and SW have been particularly intense in 4 making this argument. But that argument proves the People’s point. It is not surprising that 5 there are fewer incidents of high BLLs in recent years. As Defendants argue, the CLPP 6 programs have been successful in reducing these cases. And it may well be that the incidence 7 of high blood lead levels have decreased; but this does not mean the efforts against lead in 8 paint should cease. All this argument shows is that the numbers have gone down; no one can 9 dispute that. What is at issue is whether we should close the door on this issue and do no more 10 than what we are doing now. 11 Defendants argued that paint was, and is not the whole problem. However, the Court 12 finds alternate sources of lead such as water and air contain only trace amounts of lead, and 13 14 neither appreciably contributes to lead poisoning in the Jurisdictions. (Tr. 141:20-143:15, 15 150:14-151:1, 152:21-159:9, 157:24-158:5, 161:1-16, 192:23-194:6, 198:21-200:14; P231.) 16 Imported food items, pottery, home remedies, and other sources of lead cause lead poisoning in 17 a small number of children in the Jurisdictions each year. Furthermore, unlike lead paint, these 18 sources of lead are easily removed from a child’s environment once identified. (Tr. 150:14- 19 151:21, 152:21-159:9, 1362:11-18, 2051:7-14, 2322:20-2324:19; P232, P231.) But the 20 existence of other sources of lead exposure has no bearing on whether lead paint constitutes a 21 public nuisance. It does not change the fact that lead paint is the primary source of lead 22 poisoning for children in the Jurisdictions who live in pre-1978 housing.

23 What is to be done?

24 Regarding the issue of remedy the Court concludes the following: 25 Consistent with their arguments throughout the trial the Defendants rely on statistics 26 and percentages. When translated into the lives of children that is not a persuasive position. 27 The Court is convinced there are thousands of California children in the Jurisdictions whose 28 lives can be improved, if not saved through a lead abatement plan. People v. Atlantic Richfield Company, et al. 97 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 The Court further finds that the proposed plan, as amended by the Court, is an 2 appropriate remedy justified by the facts and the law. In so doing, the Court is persuaded by 3 Dr. Jacobs’ experience and expertise which greatly eclipse that of the Defendants’ expert in 4 these matters. The cost and time will be reduced significantly by limiting the Plan to interior 5 surfaces. The Plan at trial calls for abatement to be carried out through the establishment of an 6 administrative process to carry out inspections, abatement, and education. (Tr. 1526:27- 7 1527:2.) That administrative process would replicate much of the infrastructure and expertise 8 that currently exists in the Public Entities. (Tr. 1527:3-15.) Creation of a fund, administered by 9 the Public Entities, dedicated to abatement of lead paint in pre-1978 homes, would eliminate 10 this replication, and would do so at a lower cost. The Court concludes there is no need to 11 establish a new bureaucracy since experienced personnel are already in place at the state and 12 local levels. Similarly, it makes no sense to charge the liable defendants with undertaking this 13 14 task. Monitoring the fund encompassed by the Plan will be accomplished by experienced 15 government employees with control by the Jurisdictions’ respective Boards of Supervisors. 16 With these general thoughts in mind, the Court turns to the individual defendants:

17 ARCO

18 The evidence summaries in Sections I.B, I.C., V.L.1, and VII.A above are 19 incorporated by reference. 20 The Court finds that the evidence as to ARCO does not meet the required elements. 21 There is a lack of evidence of knowledge by ARCO or its predecessors of adverse health 22 effects from exposure to residential lead paint during the relevant time period. As described 23 above, the People have failed to prove by a preponderance of evidence that there is a sufficient 24 nexus between ARCO and the jurisdictions to impose liability against that defendant. The 25 People’s own experts were unable to make the case that ARCO promoted lead paint in the 26 jurisdictions. At most ARCO promoted paints containing lead for only two years and that was 27 to the trade, not the general public. The Court finds the People have not met the burden of 28 People v. Atlantic Richfield Company, et al. 98 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

2 ARCO.

3

4 CONAGRA

5 The evidence summaries in Sections I.B, I.C., V.L.2, and VII.B above are 6 incorporated by reference. 7 ConAgra was a large producer and supplier of lead within the jurisdictions. ConAgra 8 had knowledge of the hazard at a minimum through the facts at issue in Pigeon. In spite of that 9 litigation ConAgra continued to sell lead-based paint into the 1940s. ConAgra was operating to 10 a major degree in the jurisdictions starting in 1900. Exs. 179, 233, ConAgra continued to sell 11 lead paint until 1958. Tr. 657, 1673 Its laches defense is discussed earlier in this decision and is 12 not dispositive. Judgment shall be entered against ConAgra. 13

14 DUPONT

15 The evidence summaries in Sections I.B, V.L.3, and VII.C above are incorporated 16 by reference. 17 The case against DuPont is largely vitiated by the stipulation that DuPont’s interior 18 residential paint products never contained white lead pigments. DuPont did not produce WLC 19 in the Jurisdictions, and was a leader in the development of paints without lead content. DuPont made no sales in California until 1924 and never manufactured WLC in this state. 20 DuPont did not participate in the lead paint marketing campaigns and did not join the LIA until 21 1948 and did so as a vehicle to promote other products and not paint. It is telling that DuPont 22 distanced itself from other paint companies by its products that were lead-free and used that 23 quality as a key advertising theme. 24 Findings Supportive of DuPont: 25 26 DuPont joined LIA AFTER campaigns in 1948 Tr. 795 27 Markowitz : DuPont ad touting its paint as “non-poisonous” Ex. P172 Tr. 1711 28 Markowitz : per stip 24 Duco never contained WLC Tr. 1825 People v. Atlantic Richfield Company, et al. 99 Superior Court of California, County of Santa Clara Case No. 1-00-CV-788657Statement of Decision

13 Coupled with the Court’s decision to limit this case to interior paint, a judgment of

14 dismissal shall be entered for DuPont. 15

16 NL

17 The evidence summaries in Sections I.B, V.L.4, and VII.D above are incorporated 18 by reference. 19 NL had actual knowledge of the hazards of lead paint as described above. NL was the 20 largest manufacturer, promoter, and seller of lead pigments for use in house paint as 21 determined in the FTC proceedings in the 1950s. NL operated large plants in the jurisdictions 22 and was an active participant in the campaigns organized by LIA. E.g., Forest products 23 campaign Tr. 709, Ex 82 Tr. 639

24 Judgment shall be entered against NL.

25

SW

26

The evidence summaries in Sections I.B, V.L.5, and VII.E above are incorporated

27

by reference.

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 SW had two plants in the jurisdictions, as well as stores and dealers (Ex. 233, 234, Tr. 2 1039) selling lead paint. SW transported millions of pounds of lead pigment to its warehouses 3 and factories during the first four decades of the 20th century.19 SW knew at an early date of 4 the occupational risks to factory workers from lead dust exposure and it is a reasonable 5 conclusion that it knew or should have known of the hazards in the home. SW was active in the 6 FPBP Campaign. Tr. 709 SW’s defenses — insufficient proof of causation, changing levels of 7 BLLs deemed harmful, blaming negligent property owners, other causes, and that there is no 8 longer a significant health issue — are not persuasive. SW’s pride in being the first paint 9 company with chemists on staff is an unintentional admission: with chemists on staff, how can 10 SW say it didn’t fully appreciate the hazards posed by lead paint? Similarly, SW’s evidence of 11 its being the champion of innovation and the do-it-yourselfer with ready-mixed paints is at 12 odds with it continuing to sell lead-based paint well into the 20th century through a large 13 14 network of dealers. 15 Ex. 58 Tr. 638

16 Judgment shall be entered against SW.

17 The Court concludes: 18 ConAgra’s conduct was a cause-in-fact of the public nuisance. 19 ConAgra, as the successor-in-interest to Fuller, created or assisted in the creation of the 20 public nuisance. (¶¶76, 137-158, 183-193.) As a result, ConAgra’s conduct was a substantial 21 factor in bringing about the public nuisance.

22 NL’s conduct was a cause-in-fact of the public nuisance.

23 NL created or assisted in the creation of the public nuisance. (¶¶ 74, 137-158, 174- 24 182.) 25 26 19 SW: “Merely doing business in the jurisdictions does not prove liability for causing a nuisance by wrongfully 27 promoting white lead. Likewise, evidence of white lead shipments to California warehouses, which served many areas outside of California, does not show the use, place of use, or the promotion of white lead.” The Court asks: But 28 why ship heavy lead across the country to warehouses if not to sell it?

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 As a result, NL’s conduct was a substantial factor in bringing about the public nuisance.

2 SW’s conduct was a cause-in-fact of the public nuisance.

3 SW created or assisted in the creation of the public nuisance. (¶¶ 73, 137-173.) As a 4 result, SW’s conduct was a substantial factor in bringing about the public nuisance. 5

6 ORDER

7 The Court orders as follows. 8

The Court finds in favor of the People and against ConAgra, NL, and SW on the

9 claim of public nuisance. 10 2. The proper remedy in this case is abatement through the establishment of a fund 11 dedicated to abating the public nuisance. This fund shall be administered by the State of California in a manner consistent with the following abatement plan (the “Plan”):20 12

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 ? Testing of interior surfaces in homes to identify both the presence of lead-based paint 2 and the presence of lead-based paint hazards; 3 ? Remediation of lead-based paint on friction surfaces (including windows, doors, and floors) by either replacement of the building component or by encapsulation or 4 enclosure of the lead-paint; 5 ? Remediation of lead-based paint hazards in excess of actionable levels21 on all other 6 surfaces through paint stabilization (as opposed to paint removal, enclosure or encapsulation); 7

8 control cleanup and dust testing, and occupant and worker protection; 9

Repair of building deficiencies that might cause the corrective measures to fail (e.g.

10 water leaks) to ensure durability of the lead hazard control measures; and

11 ? 12 Education of families and homeowners on lead poisoning prevention and paint- stabilization techniques to remediate lead based paint hazards on non-friction surfaces.

13 C. Administration

14 15 ? Payments into the fund shall be made directly to the State of California’s Childhood Lead Poisoning Prevention Branch (“CLPPB”). 16

The Jurisdictions shall apply for grant funds from the State on a specific needs basis.

17

The CLPPB will be responsible for reviewing grant applications prepared by the

18 applying jurisdictions, and thereafter make specific grants to the Jurisdictions. 19

The CLPPB shall be responsible for the administration of the financing of the Plan at

20 the statewide level. 21

The Jurisdictions, through their existing lead control programs, will administer the Plan

22 consistent with all applicable State, Federal and local government regulations. The Jurisdictions shall: 23

24 o 25 o Establish the Priority of Inspection and Lead Hazard Control Work Conduct workforce development, if necessary

26 o Conduct a public education campaign 27 28 21 Actionable lead for this plan is defined as ?1 mg/cm2 or ?5,000 ppm for lead in deteriorated paint, ?10 µg/ft2 for lead in settled dust on floors, and ?100 µg/ft2 for lead on interior window sills.

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 o Conduct bidding for and payment of hazard control contractors 2 o Contract with independent contractors to conduct all actionable lead hazard 3 control, inspections and risk assessments 4 o Perform lead hazard control plans for each property 5 o Conduct all clearance tests 6 o Design of all hazard control plans for each property that will undergo hazard 7 control 8 o Design of any needed repairs to ensure the viability of hazard control 9 o Review of payments to hazard control contractors to ensure clearance is achieved and all work has been completed in compliance with hazard control 10 specifications and to the satisfaction of the owners and occupants before 11 certified contractors are paid 12 o Review workforce development and training operations to ensure the needed workforce is being obtained and is in place 13 14 o Review of public education and outreach materials and methods

15 D. Enrollment

16 Property owners who enroll in the Plan would be screened to see if they own a property that qualifies for inspection and services. If so, the individual jurisdiction shall 17 coordinate with that property owner to schedule an inspection for lead based paint 18 hazards in the home, as described below. The Jurisdiction will keep a complete public database of all properties that have been enrolled in the Plan, the dates of inspection, 19 and the manner and method of hazard control services performed at the address, if any. 20 If the property owner does not enroll in the Plan after appropriate educational outreach 21 and counseling, the property should be deferred for actionable lead hazard control until the property owner vacates or sells the property, unless there is a child who is at risk. A 22 listing of properties that have failed to enroll in the Plan or subsequently failed to undergo actionable lead hazard control will be made available and accessible to the 23 public. 24

E. Priorities

25 In order to balance efficiency, simplicity and practical considerations, the “worst-first” 26 prioritization option should be used. This means that housing units meeting one or 27 more of the following criteria should be treated first and should be assigned to Priority Group 1. 28 PRIORITY GROUP 1

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 ? Housing property currently containing children with elevated blood lead levels and 2 known actionable lead hazards 3 ? Housing with a history of repeated, multiple poisonings occupied by a young child who has not (yet) developed an elevated blood lead level and which has never undergone 4 any form of actionable lead treatment or hazard control 5 ? Housing with repeated notices of non-compliance with existing lead poisoning 6 prevention laws 7 ? Housing with substantial deferred maintenance defined by ten or more code violations in the past 4 years 8 9 ? Housing identified as “high risk” by local authorities 10 ? Housing located in high-risk census tracts or neighborhoods 11 ? Vacant units located in high-risk census tracts or neighborhoods whose owners commit 12 to renting to low-income families following hazard control for a specified time period 13 ? Properties meeting the criteria shown below should be assigned to the lower risk Priority Group 2 and should be treated for actionable lead only after most of the higher 14 risk Priority Group 1 buildings have been completed 15 PRIORITY GROUP 2 16

Properties with lower lead paint concentrations or with lead paint on fewer and/or

17 smaller surfaces (this would include buildings where the maximum paint lead loading is greater than or equal to 1 mg/cm2 but less than 5 mg/cm2 and where the interior lead 18 painted surface area is less than 100 square feet) 19

Properties with no history of lead poisoning

20

Residential buildings built after 1950 or not in high risk neighborhoods or census tracts

21 22 ? Properties that have undergone “gut” rehabilitation, which means that all painted interior surfaces were removed and replaced with post-1980 building materials, finishes 23 and coatings 24 ? Vacant housing units that could one day be occupied by children 25

Properties not located in one of the high risk census tracts

26

The Jurisdictions shall prioritize Properties into Priority Group 1 or 2, as needed to

27 promote Plan efficiency and public health

28 F. Completion of a Comprehensive Lead Hazard Inspection

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 For most properties that are enrolled in the Plan, a new inspection for the presence or absence of actionable lead (as defined below) shall be conducted. Tests will be conducted 2 using a portable X-Ray Fluorescence (“XRF”) instrument, a handheld device that measures the 3 presence and quantity of lead based paint on surfaces. For those properties that have been inspected within the past 5 years, the earlier results can be used if desired by the owner or 4 occupant, so long as they comply with EPA and HUD requirements related to the number of XRF readings within a given property and the number of housing units tested within a given 5 multifamily housing development, quality control procedures, and performance of the 6 inspection by a California certified lead-based paint inspector, and the other criteria specified below. 7 For all properties that have not been inspected or were inspected more than 5 years ago, 8 a new actionable lead-based paint inspection should be completed, unless there is adequate 9 documentation that the property is free of and/or has been made free of actionable lead hazards. The inspection should be done at a time convenient to the occupant and should be 10 adequately staffed so that it can be completed in no more than two hours for a typical California housing unit to reduce the burden on the occupant. Allowance for a longer time for a 11 larger property should be granted on a case by case basis. All data from the inspection shall be 12 retained by the Jurisdiction for the life of the building, by the owner of the building until it is sold or demolished (all data should be transferred to the new owner) and by the inspector for at 13 least 5 years. The Jurisdiction should construct and populate a publicly available inspection 14 and hazard control database. 15 Under this Plan, the Jurisdiction will be required to establish programs throughout the jurisdictions that provide homeowners with access to comprehensive residential lead paint 16 testing in conformity with the prioritization set forth above. That testing will be available to all homeowners and residents of Properties not meeting the exclusion criteria set forth above. The 17 comprehensive lead inspection will properly identify those surfaces with actionable lead and 18 will identify those Properties that have no lead-based paint. Presumption of actionable lead hazards will not be permitted. Previous lead inspection data should be used only if it is of 19 sufficient quality and only if it is augmented as needed. 20 Lead paint inspections under this plan must be done in accordance with an XRF 21 Performance Characteristics Sheet (PCS) issued by HUD and EPA and have all the required measurement and supporting quality control data. It must include lead paint measurements on 22 all surfaces with a similar painting history in all rooms, room equivalents, exteriors and site, including measurements on floors, walls and ceilings with intact and non-intact paint and 23 coatings using the standard HUD lead-based paint inspection protocol. 24

G. Identification and Reporting of Actionable Lead Paint

25 The results of the comprehensive lead inspections performed on included housing units 26 will be used: (1) to maintain a database that is available to the public documenting the location 27 of lead based paint and lead based paint hazards in inspected properties; and (2) as the basis for recommending lead hazard control activities in properties. 28

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 To be considered actionable and therefore eligible for lead hazard control programs as set forth in the recommendations that follow, the lead levels on surfaces and in dust must meet 2 certain actionable levels. 3 The level of lead in paint to be considered actionable under this plan should be ?1 4 mg/cm2 (or ? 5,000 ppm if loading cannot be measured for technical reasons). The lead paint should be measured using field-based XRF lead paint analyzers with a Performance 5 Characteristics Sheet; sodium rhodizonate, sodium sulfide or other spot test kits should not be 6 used to determine the presence of actionable lead for the purposes of this plan. 7 The level of lead in settled dust to be considered actionable under this plan should be ?10 µg/ft2 on floors and ?100 µg/ft2 on interior window sills. Dust lead should be measured 8 using the standard wipe sampling method. 9

H. Hazard Control Criteria and Options

10 Once actionable lead has been found on surfaces or in dust in a property, the property 11 owner and the Jurisdiction will develop a plan for lead hazard control. 12 Under the Plan, all replaced building components should be at least equal in quality to 13 the lead painted components they replace. The judgment on what constitutes “equal to” should be made by the Jurisdiction, that will design the hazard control in collaboration with owners 14 and occupants. If an owner decides to replace a building component with a higher cost equivalent item, the incremental cost should be borne by the owner. 15 16 The plan contemplates that the first prioritization of any lead hazard control plan is replacement of lead painted windows and doors, which will yield the largest health benefit in 17 the shortest time period. 18 If the existing substrate is incapable of supporting an enclosure system, it should be 19 either repaired to support an enclosure, or the component should be replaced. 20 Walls: For lead painted interior walls and ceilings, (new plaster is an acceptable enclosure method, as long as the new lathe is physically attached to the substrate) 21 Floors & Stairs: Enclosure with new subflooring and finish goods (paint stabilization 22 should not be permitted on lead-painted floors and lead-painted stairs because of the likelihood 23 of deterioration due to traffic and on-going impact). 24 Ceilings: Paint Stabilization or Enclosure with drywall or equivalent

12 I. Performance of Hazard Control Work

13 The results of the actionable lead inspection will be used to devise actionable lead hazard control work specifications. The specific products and methods, together with the 14 inspection report and expected timelines, will be presented to the owner and occupants and a 15 plan will be agreed to between the homeowner and the Jurisdiction.

16 J. Public Education and Outreach Plan

17 The Jurisdiction shall conduct a public education and social marketing campaign to 18 engage the citizens, building owners, construction, and lead mitigation and inspection

19 K. Costs and Timeline

20 The Jurisdictions shall utilize their existing expertise in the following areas: Inspection, 21 Risk Assessment, Hazard Control, Construction, Specification Writing and Bidding; Contracting and Procurement; Accounting and Payment Processing; Public Education and 22 Outreach; Toxicology; Environmental, Housing and Public Health Regulation and Practice; Evaluation; Oversight; Legal; Insurance; Information Technology; Public and Media Relations; 23 and Clerical and Other Support Staff. 24

L. Funding

25 Since the Court orders abatement of interior surfaces only, with the Jurisdictions 26 conducting the inspections using their respective staffs, the estimate for inspection costs is reduced from $569,000,000 to $400,000,000. This is calculated by using the per-unit cost of 27 inspection testified to at trial. The total cost of inspection of pre-1978 homes in the 28

3 M. Cost of Remediation

4 Remediation limited to interior surfaces results in an estimated cost of remediation of $759,284,467, or approximately $750,000,000.24 5 Education expenses are included in these figures. 6

7 Conclusion:

8 Therefore, the Court orders: 9 The Defendants against whom judgment is entered, jointly and severally, shall pay to the State of California, in a manner consistent with California law, $1,150,000,000 (One 10 Billion One Hundred Fifty Million Dollars) into a specifically designated, dedicated, and 11 restricted abatement fund (the “Fund”). 12 The payments into the Fund shall be within 60 days of entry of judgment. 13 The Fund is to be administered by the Director of the California CLPPB program for 14 the benefit of people within the 10 Jurisdictions and the costs incurred by the State of California to administer the Fund shall be paid from the Fund. 15 Monies from the Fund shall be disbursed to each jurisdiction to be supervised by that 16 County’s Board of Supervisors (including the Board of Supervisors of the City and County of 17 San Francisco) and the city councils of the cities of Oakland and San Diego, consistent with 18 19 22 P283_015. 20 23 Tr. 1548:12-21. 21 24 To determine the cost of interior-only remediation, the Court has considered reducing the Jurisdictions’ estimated total remediation costs based on the percentage of total remediation costs attributable to interior remediation, as set 22 forth in the Evaluation of the HUD Lead Hazard Control Grant Program (National Center for Healthy Housing and University of Cincinnati, 2004) (“HUD Evaluation”) – which was relied on at trial by both the People’s abatement 23 expert, Dr. David Jacobs, and Defendants’ abatement expert, Mr. Benjamin Heckman. (P70_119 ¶ 6.2.2 [HUD Evaluation]; Tr. 1506:24-1508:18, 1510:12-22, 3195:1-3196:4; D1438.4.) According to the HUD Evaluation, the 24 median cost of interior remediation strategies is approximately $5,960/unit, while the median cost of exterior remediation strategies is approximately $1,870/unit. Using these median values to determine the ratio of interior 25 remediation costs to total remediation (interior and exterior) costs suggests that approximately 76% of total remediation costs are attributable to interior remediation ($5,960/($5,960 + $1,870)). (P70_119 ¶ 6.2.2.) 26 At trial, Dr. Jacobs testified that remediation of homes in the Jurisdictions, performed in accordance with the procedures set forth in the People’s Abatement Plan, would average $2,000 per housing unit. (1532:18-1533:18; see also P262 at 27 23-24.) Since approximately 76% of lead remediation costs are attributable to interior remediation, the average per-unit cost of remediation can be reduced from $2,000/unit to approximately $1,500/unit ($1,500 is approximately 76% of $2,000). This 28 reduces the People’s total estimated remediation cost from approximately $1,000,000,000 to approximately $750,000,000.

E-FILED: Jan 7, 2014 4:06 PM, Superior Court of CA, County of Santa Clara, Case #1-00-CV-788657 Filing #G-59619 1 past practices regarding lead detection, removal, and prevention. Each jurisdiction shall be entitled to receive up to the following maximum percentage and distribution from the fund:25 2 3 Alameda* 9% $103,500,000 4 (*including the residents of the City of Oakland)

Los Angeles

55%

$632,500,000

Monterey

2%

$23,000,000

San Mateo

5%

$57,500,000

Santa Clara

9%

$103,500,000

San Diego

7%

$80,500,000

San Francisco

7%

$80,500,000

Solano

2%

$23,000,000

Ventura

4%

$46,000,000

5 6 7 8 9 10 11 12 13 14 The jurisdictions shall apply for grants from the Fund with a three-step program as 15 described. Exterior abatement and remediation is excluded from this order. 16 Dr. David Jacobs, or his designee, shall serve as a consultant to the Plan. He shall be compensated at a rate of $300 per hour, with payments to be made out of the Fund. His 17 compensation for any 12 month period shall not exceed $50,000. Any ordinary expenses 18 incurred by Dr. Jacobs, such as travel, meals, and incidentals shall be in addition to his hourly charges and shall be consistent with the State of California reimbursement guidelines for 19 government employees. 20 The program shall last for four years from the date of total payment by defendants into the Fund. If, at the end of four years, any funds remain, those monies shall be returned to the 21 paying defendants in the ratio by which the program was initially funded. The Superior Court 22 of California, County of Santa Clara, shall have continuing jurisdiction over the Plan and its implementation. 23

SUMMARY OF DECISION

24

The Court rules against ARCO and ConAgra’s defense of no successor liability.

25 26 2. The Court rules that constructive notice on the part of the Defendants is sufficient. 27 28 25 Percentages derived from number of houses pursuant to chart at Section V.H supra.

The Court rules that Defendants ConAgra, NL, and SW were substantial factors

5 in causing the injury alleged. 6

The Court rules that LIA and NPVLA were not agents of Defendants, but were

7 conduits of information and vehicles by and for the hazards and promotion of lead paint. 8 9 7. The Court rules that as to Defendants ConAgra, NL, and SW the People have sustained the burden of proof on all issues delineated by the Appeals Decision. 10

The Court rules that ARCO and DuPont are found not liable.

11

The Court finds in favor of the Public Entities and against SW on SW’s cross-

12 claim for declaratory relief. 13 10. Defendants’ Affirmative Defenses do not bar this action. 14 11. The Court orders the institution of the abatement plan and establishment of the 15 Fund as described above. 16 12. The People shall prepare a Judgment consistent with this Decision within 5 17 days.

The Court rules that Defendants ConAgra, NL, and SW were substantial factors

5 in causing the injury alleged. 6

The Court rules that LIA and NPVLA were not agents of Defendants, but were

7 conduits of information and vehicles by and for the hazards and promotion of lead paint. 8

The Court rules that as to Defendants ConAgra, NL, and SW the People have

9 sustained the burden of proof on all issues delineated by the Appeals Decision. 10

The Court rules that ARCO and DuPont are found not liable.

11

The Court finds in favor of the Public Entities and against SW on SW’s cross­

12 claim for declaratory relief. 13 10. Defendants’ Affirmative Defenses do not bar this action. 14 11. The Court orders the institution of the abatement plan and establishment of the 15 Fund as described above. 16 12. The People shall prepare a Judgment consistent with this Decision within 5 17 days.